* 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 XAU= 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 GCcv1 , 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. in SPDR Gold Trust GLD , 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 (N:BAC) said on Friday. 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. 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