Gold-Mining Stock Funds Still Lead Pack : Investing: Bullion's price surged in the second quarter as global demand for the metal zoomed, especially in Asia.

Gold-Mining Stock Funds Still Lead Pack : Investing: Bullion’s price surged in the second quarter as global demand for the metal zoomed, especially in Asia.

By TOM PETRUNO

July 5, 1993 12 AM PT

TIMES STAFF WRITER

For a second straight quarter, gold-mining stock funds beat all other mutual fund categories.

The gold funds rocketed nearly 30% on average in the quarter ended June 30, bringing their six-month average gain to 59.3%, according to fund-tracker Lipper Analytical Services.

Gold bullion’s price surged in the second quarter as global demand for the metal zoomed, particularly in Asia. Worries about rising inflation in the United States also helped turn investors to gold, as did extremely volatile currency markets.

Lucille Palermo, manager of the Van Eck Gold/Resources fund in New York, says the streaking gold mining stocks may take a breather this quarter. “They’re probably ahead of bullion’s price” of $386, she says.

But she also believes that the metal’s price will hit $425 to $450 before year’s end, and that “$450 is not in the stocks’ prices now.”

Another classic inflation play--natural resources funds--also had a good quarter, gaining 7.5% on average. But in recent days, a slump in oil prices has led to widespread profit-taking in energy stocks.

Other major stock fund trends in the second quarter and first half:

* International funds advanced sharply, led by Pacific-region and Japan-only funds. Foreign markets were generally stronger than the U.S. market in the first half. Also, Americans investing abroad had their returns boosted by the weak dollar.

* Science and technology funds gained as strong demand for personal computers worldwide helped fuel renewed excitement about tech investing.

* Health and biotechnology funds bounced back in the second quarter from deep first-quarter losses. But the average health fund still is down 8.3% for the year.

* Real estate and financial services funds, stars of the first quarter, fell marginally in the second quarter. Worries about rising interest rates clipped real estate-related and banking stocks in May, though those fears have eased in recent weeks.