* Gold rebounds from 1.6 pct fall on Monday
* SPDR adds a further 19 tonnes of gold
* China and India turn sellers as gold prices rally (Updates prices, adds comment)
By Clara Denina
LONDON, Feb 23 (Reuters) - Gold rose by about 1 percent on Tuesday as European shares fell and inflows into bullion funds continued, boosting prices.
Assets in SPDR Gold Trust GLD , the top gold-backed exchange-traded fund (ETF), rose more than 19 tonnes to 752.29 tonnes on Monday, the highest since March 2015. GOL/ETF
The fund's inflows since the beginning of the year have already surpassed outflows for the whole of 2015.
Spot gold XAU= was up 1 percent at $1,220.21 an ounce by 1453 GMT. Prices had fallen 1.6 percent on Monday, when the dollar and equities rallied.
"If there is another big sell-off in equity markets, then levels around $1,260 are very achievable because you'd see defensive investors coming forward," said ETF Securities analyst Martin Arnold.
Bullion was boosted by European and U.S. shares turning negative, dropping from the previous session's two-week high on disappointing earnings updates and lower oil prices. MKTS/GLOB
The dollar fell from a three-week high against a basket of main currencies. .DXY
"But in an environment where volatility remains elevated and investors are starting to dip back into equity markets, current levels are a pretty decent value for gold," ETF Securities' Arnold said.
The volatility index .VIX , which measures implied volatility of stock options and is often seen as an investor fear gauge, fell below 20 percent this week.
Gold has gained about 15 percent since the beginning of the year, largely on the back of concerns over financial instability and economic growth that led to turmoil in international stock markets. It has also benefited from the repricing of expectations for U.S. interest rate rises.
The metal, however, could be vulnerable to more corrections in the short term, analysts said.
"We may see some profit-taking because the price has increased by almost 20 percent in the past couple of months," Commerzbank (DE:CBKG) analyst Eugen Weinberg said.
"The metal continues to be supported by ETF inflows but I would not be surprised to see a setback before another leg-up."
Technically, the gold price should stabilise in the $1,200 to $1,192 an ounce area, Commerzbank said.
Top consumers China and India have turned sellers of gold as prices have rallied. 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. other precious metals, silver XAG= rose by 0.6 percent to $15.25 an ounce after hitting a two-week low of $14.90 on Monday. Platinum XPT= was up 1 percent at $936.10, while palladium XPD= firmed 1.1 percent to $499.50.