Gandalf is a quick thinker and even though his sight is nowhere as good as that of an elf, he has a very developed sense of observation... He notices that. He doesn't know what to think of it just yet, but it appears obvious that girl and- whatever it is in the painting are related.

He frowns a bit as he looks at the painting as well, then turns and looks at her worriedly.

"I know very little about mermaid, witches and monsters from your homeworld- To say nothing" he says "But I can tell this painting has an effect of you, and I am not sure it is a positive one."