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PRECIOUS-Gold rises above $1,220, set for best month in four years

* Gold inches up after Friday's 1-pct loss
    * Metal up over 9 pct in Feb, biggest jump in four years
    * Investors continue to channel money towards gold funds

 (Adds India budget expectation, updates prices)
    By A. Ananthalakshmi
    SINGAPORE, Feb 29 (Reuters) - Gold edged up on Monday and
looked set to log its best monthly performance in four years,
bolstered as turmoil in stock markets drove safe-haven demand.
    Bullion has rallied about 15 percent this year as investors
have sought safety in the metal as concerns over the global
economy hit share markets. The rally has also been spurred by
expectations the Federal Reserve will not raise U.S. rates this
year. 
    Spot gold had gained 0.3 percent to $1,226.30 an
ounce by 0651 GMT, after dropping 1 percent on Friday on strong
U.S. economic data. 
    Despite Friday's losses, gold has gained 9.8 percent in
February, its biggest monthly jump since January 2012. U.S. gold
, with a 10-percent gain, was also headed for its best
month in four years. 
    "Gold still shines as a safe-haven in the current equity
rout," OCBC Bank said in a note, adding that higher hurdles for
the Fed to hike rates three times this year as per the bank's
December expectations would also support prices above $1,200.   
  
    "Early Chinese buying at a modest on-shore premium has seen
gold trade as high as $1,226 today," said MKS Group trader Sam
Laughlin.
    Gold prices on the Shanghai Gold Exchange were at a premium
of about $2 an ounce, indicating buying interest from top
consumer China.
    Money flows into gold continued to indicate optimism over a
sustained rally in prices.
    Hedge funds and money managers raised their bullish stance
in COMEX gold to a one-year high in the week to Feb. 23, U.S.
Commodity Futures Trading Commission data showed on
Friday. 
    Assets in SPDR Gold Trust, the world's top gold-backed
exchange-traded fund, rose to 762.41 tonnes on Friday, the
highest in about a year.  
    Gold funds accumulated their largest inflows since 2009 in
the week to Feb. 24 as financial market turmoil continued to
unnerve investors, Bank of America Merrill Lynch said on Friday.
 
    Physical demand in Asia, however, remained subdued last
week, with the Indian market falling to record discounts as
consumers postponed purchases on expectations of a cut in the
import tax when the government presents the annual budget on
Monday. 
    Dealers in India were expecting a reduction of up to 4
percentage points in the import tax from a record 10 percent
imposed in 2013 in an effort to curb high imports. 
   
  
    PRICES AT 0651 GMT   
 Metal            Last     Change  Pct chg
                                          
 Spot gold         1226.3    4.09     0.33
 Spot silver        14.66   -0.02    -0.14
 Spot platinum     915.95    2.65     0.29
 Spot palladium    488.85    7.63     1.59
 Comex gold        1227.4       7     0.57
 Comex silver      14.665  -0.024    -0.16
                                          
 COMEX gold and silver contracts show the
 most active months
 
 (Reporting by A. Ananthalakshmi; Editing by Joseph Radford)
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