OUTLOOK-India gold to tread higher, may test record high

MUMBAI, Oct 12 (Reuters) - India gold futures may tread higher this week to test record highs on the back of rising crude oil and expectations of a weak dollar overseas, analysts said.

Investors would also closely watch the U.S. and eurozone inflation data due later in the week to see whether government stimulus is feeding higher prices, which may lead to early monetary tightening. See [ID:nSP492124]

The most-traded gold December contract MAUV9 was 0.39 percent higher at 15,899 rupees per 10 grams at 4:49 p.m., after hitting a high of 15,936 rupees.

The contract had rallied to a seven-month high of 16,009 rupees in Sept. 16, near the record high of 16,040 rupees struck on Feb. 20.

"The outlook would be positive on dollar and strong crude," said Gnanasekar Thiagarajan, director, Commtrendz Research in Mumbai.

"It could cross 16,000 rupees very easily," said Thiagarajan, adding resistance is placed at 16,045/16,250 rupees.

Despite dollar's gains against the yen, its sentiment remained bearish, and relinquished early gains against the euro, after a 1 percent rise in European shares prompted some demand for riskier assets. [USD/]

A weak dollar spurs investment in alternative assets like the yellow metal.

ICE Brent crude LCOc1 futures jumped above $71 a barrel, buoyed by indications of stronger demand and a breach of technical resistance levels. [O/L]