By Chris Oliver
HONG KONG (MarketWatch) -- Gold futures dropped slightly in Asian trade Monday, drifting back toward the $1,600-per-ounce level amid an extended holiday weekend for markets around the region. Gold for February delivery GC2G -0.12% eased $1.60, or 0.1%, to $1,609.00 per troy ounce on Comex. Market cues were limited, as many major bourses around the region remained closed for the holidays. But in possibly supportive news for the metal, a senior researcher at the People's Bank of China said Beijing should use its foreign-exchange stockpile to buy gold as a hedge against inflation. The central bank's research director Zhang Jianhua was cited as saying Monday in the central bank publication Financial News that gold purchases should be ramped up when prices drop, although he gave no indication of what proportion of the nation's $3.2 trillion forex reserve should be allocated to investments in gold.
