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RTR: OUTLOOK-India gold seen falling on soft crude, strong dollar
By Ruchira Singh

MUMBAI, Oct 6 (Reuters) - India gold prices are expected to be driven down by falling crude oil and a stronger dollar in the midst of the global market turbulence this week, analysts said.

"People are liquidating positions across all asset classes... that scenario will bring down gold as well," said K. N. Rahaman, deputy research head at Way 2 Wealth Securities Ltd.

Gold's generally inverse relation with the dollar and its tendency to track crude could help soften prices, though a weaker Indian rupee could arrest some of the falls, analysts said.

"Some more weakness can be expected in crude oil due to the weak demand outlook and the euro could depreciate on fears the U.S. financial crisis is spreading," said an analyst at Motilal Oswal Commodities Broker Pvt Ltd.

A weaker euro would further strengthen the dollar, and in turn weaken gold.

However, one analyst said the recent safe haven buying of gold may continue through this week, boosting prices.

"Risk aversion and safe haven buying will support gold," said Rajini Panicker, head of research at MF Global Commodities India Ltd.

The market would keenly watch the Bank of Japan's interest rate decision on Tuesday and the Bank of England's on Thursday, the analysts said.

The following are weekly recommendations for the December contract <0#MAU:> on the Multi Commodity Exchange of India Ltd in rupees per 10 grams:

Brokerage Recommendation Stop Loss Target ================================================================ ======= Kotak Sell around 12,770 Close above 13,080 12,510,12,317

Motilal Sell around 12,850 13,000 12,450

Way 2 Wealth Sell around 12,900 13,050 12,550

MF Global Buy around 12,560 Below 12,300 13,050

* At 6:19 p.m., the December contract on the MCX was trading at 13,200 rupees per 10 grams, up 2.80 percent from the previous session. (Editing by Harish Nambiar)