By Tim Cocks

IGA BARRIERE, Congo, Nov 7 (Reuters) - At a bustling outdoor market, gold traders spread plastic sheets on the ground and tip piles of shiny yellow nuggets onto home-made aluminium scales.

With handfuls of grubby U.S. dollar bills changing hands at a frantic pace amid fierce haggling, it could be California 150 years ago. Except for the mobile phones, calculators and women in brightly-coloured dress balancing baskets on their heads.

This is eastern Democratic Republic of Congo as it emerges from a decade of chaos and mineral-fuelled bloodshed.

Merchants in its gold-rich but violence-prone northeast hope a final round of historic elections held in late October will wind up a peace process and end years of instability that have turned their once lucrative business into a hazard.

"We would like to do much more business but this war has made it too dangerous to go out and look for gold," said Samuele Mugenyi, a trader at Iga Barriere gold market.

As results trickle in from the Oct. 29 presidential run-off between former warlords, President Joseph Kabila and his rival Jean-Pierre Bemba, many Congolese say they want whoever wins to bring not just an end to the violence but a functioning economy.

The northeast Ituri district was heavily fought over and occupied several times by neighbouring Uganda during Congo's 1998-2003 war which spawned a continuing humanitarian disaster in which an estimated 4 million people have been killed.

Ituri has since hosted frequent battles between rival militia and ill-equipped government soldiers.

"I loved this job since I was a kid," said Mugenyi. "But our problem is Congo is not stable. Besides the danger, the warlords take 'taxes', which eats into your margins."

Even after successfully navigating the dangers of war-torn eastern Congo, making a living can be tough.

"I manage to shift a kilo a week, sometimes more, which grosses $20,000," said Christophe Lonema, president of the town's gold traders' association.

"It sounds a lot, but you're lucky to make $500 from that once your costs are taken out," he said, wrapping a small heap of gold dust in the foil of a cigarette packet.

"NO BANK LENDS TO US"

"There's a liquidity shortage," Lonema said. "Business would be booming if we had access to credit but no bank lends money to an Ituri gold trader. Whoever wins these elections should set up microfinance for us."

As Lonema spoke, the clouds burst into rain, flooding the streets with rivers of chocolate-coloured mud and forcing people to huddle under the town's few tin roofs.

At nearby Nizi Pkata gold mine, men and boys covered in mud from head to toe submerge themselves in deep caverns, scraping out plastic bowls full of silt which are then meticulously sifted through for precious yellow flecks.

A teenage boy fills his pan with water and gently sieves out the sludge to reveal black sand dotted with gold dust.

"It's better than school," said Janbandi Nzaringa, who said he was 18. "You get money -- even $5-10 in a good day."

Nzaringa's earnings pay for three relatives' school fees and feed and clothe his widowed mother and her household.

"But once I have enough, I'm going back to school," he said.

At a defunct assembly plant in Iga Barriere that used to make and fix parts for a now, also closed, gold refinery, abandoned trucks and machine cogs rust away as chickens peck for morsels between heaps of decaying scrap steel.

Plant manager Claude Kubonge has not been paid since 1991, when former dictator Mobutu Sese Seko's kleptocracy started to melt down.

"Then in a few years the war came and shut everything down," he said. Bereft of state pay, Kubonge ekes out a living growing manioc.

"But I'm still looking after this place in the hope that we're going to have a stable government. Then I might get paid for all these years of service," he said, glancing at a pile of discarded electric turbines rusting in the damp air.

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