* Gold rises after losing nearly 2 pct overnight
* Asian stocks drop from 7-week high
* SPDR assets add another 19 tonnes of gold
(Updates prices)
By A. Ananthalakshmi
SINGAPORE, Feb 23 (Reuters) - Gold rose on Tuesday as Asian
shares reversed gains and the dollar slipped, with the metal
also supported by big inflows into bullion funds.
Asian shares turned negative after rising to a seven-week
high as the oil price rally that boosted global equity markets
reversed. The dollar index fell from a three-week top.
Spot gold had risen 0.7 percent to $1,216.30 an ounce
by 0703 GMT. Bullion had fallen as low as $1,201.63 on Monday,
when it lost 1.6 percent on the day as equities rallied.
Bullion could be vulnerable to more corrections if stock
markets strengthen, analysts said.
"Prices may stay under pressure at least in the near term,"
said HSBC analyst James Steel. "Greater investor risk appetite
erodes demand for gold, while increased scrap adds to supply as
major consumers are shying away from physical purchases."
Top consumers China and India have turned sellers of gold as
prices rally. Discounts in India have hit a record high, while
prices in China have also turned cheaper relative to the global
benchmark, in a sign of waning demand.
Gold has gained this year largely on the back of turmoil in
stock markets and concerns over the global economy. But the
metal has given back some of those gains as markets have
stabilised.
The volatility index, which measures implied
volatility of stock options and is often seen as an investor
fear gauge, fell below 20 percent this week, hitting the lowest
closing level since early January.
HSBC's Steel said the recent decline in gold prices doesn't
mean the rally is over, adding that demand for bullion exchange
traded funds and possible weakening of the dollar could support
the metal.
Assets in SPDR Gold Trust, the top gold-backed
exchange-traded fund, rose 2.64 percent to 752.29 tonnes on
Monday, the highest since March 2015.
The 19.33-tonne inflow matches Friday's increase, which was
the fund's biggest single-day inflow since August 2011.
The fund's inflows since the beginning of the year have
already surpassed outflows for the whole of 2015.
Among other precious metals, silver ticked up after
hitting a two-week low of $14.90 an ounce on Monday. Platinum
held near a two-week low hit in the previous session,
while palladium firmed.
PRICES AT 0703 GMT
Metal Last Change Pct chg
Spot gold 1216.3 7.94 0.66
Spot silver 15.225 0.055 0.36
Spot platinum 926.5 0 0
Spot palladium 493.98 0.23 0.05
Comex gold 1216.8 6.7 0.55
Comex silver 15.24 0.056 0.37
COMEX gold and silver contracts show the
most active months
(Reporting by A. Ananthalakshmi; Editing by Joseph Radford and
Biju Dwarakanath)