spatial autocorrelation based on distance

My data:

Gage_number Latitude    Longitude   Date    Gage_1  Gage_2  Gage_3

1   35.02   -80.84  1/1/2002    0.23    0   0.7
2   35.03   -81.04  1/2/2002    0   0   0.2
3   35.06   -80.81  1/3/2002    3.2 2.1 0.1
This is just a subset of data. I around 50 gauge stations. I want to find spatial auto correction between my gauge stations for rain fall. Based on distance between them. I have created my distance matrix. But I don’t want to use any library in R. I want to do all steps in a function.

loc <- read.table("rain_data.txt",header=TRUE,fill=TRUE)  
gauge.dists <- as.matrix(dist(cbind(loc$Latitude, loc$Latitude))) #distance matrix
Now since distance between gauges is not uniform. I want to use a certain bin size to decide about distance lags.

Pseudocode:

If the distance between guage pair 1-2 is 1 meter then assign a distance lag of 1 and so on So Lag 1=intergage dist=1 meter. So Lag 5=intergage dist=5 meter After creating that matrix I will find autocorrelation between gauge pairs.

so for lag 1 intergage dist=1 for lag 5 intergage dist=5

Gage pair   date    RainA   RainB       Gage pair   date    RainA   RainB

1-2 1/1/2002    0.23    0       1-3 1/1/2002    0.23    0.7
1-2 1/2/2002    0   0       1-3 1/2/2002    0   0.2
1-2 1/3/2002    3.2 2.1     1-3 1/3/2002    3.2 0.1
I have a hard time translating it into loop or a function. Any ideas?