Gold funds glittered but bond funds lost money in the third quarter as inflation fears and rising interest rates hit the financial markets.

Gold funds rose 19.4 percent during July, August and September to bring their total gains for the first nine months of this year to 75 percent.

But the performance was a volatile one. The gold funds, after gaining 49.4 percent in the first quarter, fell 2.1 percent in the second quarter before turning higher during the summer and early fall. Investors generally put money into gold funds when they fear higher inflation, which reduces the value of dollars invested in stocks and bonds.

Gold funds ran far ahead of the performance of the Dow Jones industrial average, which was up 8.1 percent, and the Standard & Poor's 500, which gained 6.6 percent, both with dividends reinvested.

Besides gold, the only other fund groups to beat the major averages were international funds, up 9.4 percent, global funds, up 7.7 percent, and science and technology funds, up 7.6 percent.

The average gain for all 870 stock funds was 5.7 percent.

Michael Lipper, president of Lipper Analytical Services, which tracks the performance of 1,345 mutual funds, said the rise of gold funds was "not a happy sign."

"Since gold is often viewed as a safety reserve in periods of unstable values, this {rise} may be seen as disturbing," Lipper said.

Lipper said he found it disquieting that while gold funds were up 19.4 percent in the three-month period, the price of gold itself rose only about 2.7 percent.

"The stocks have outrun the metal," he said, noting that the gap might eventually lead to sharp drop in the price of gold stocks.

The best-performing gold fund was Keystone Precious Metals, up 26.5 percent for the quarter. Of the 25 top-performing funds, 21 were gold funds.

Frederick Thorne, president of Harbor Capital Management Co. of Boston, which manages the Keystone portfolio, agreed with Lipper's view of gold prices.

"If the price of gold looks like it is performing poorly, share prices may go down rather significantly," Thorne said. However, Thorne said he was betting that the price of the precious metal would continue to rise between now and the end of the year.

Thorne said the Keystone fund's performance was aided by a heavy profit in Newmont Mining Corp. stock. When Newmont shares rose sharply on takeover efforts, Keystone was holding 15 percent of its funds in Newmont shares, he said.

Bond funds were hard hit by the rise in interest rates, with many funds sustaining heavylosses. The fixed-income funds lost 2.4 percent in the third quarter on top of a 1.9 percent loss in the second quarter. Despite a 3.8 percent gain in the first quarter, the bond funds fell 1.8 percent for the nine months.

Bond funds are hurt when interest rates rise. Interest rates and bond prices move in opposite directions to adjust the yields on older bonds so they can remain competitive with newer bonds.

"Bonds are dangerous" in the long run, said Lipper. He said he expected a bond market rally within the next few months, but after that interest rates should continue to rise and bond prices to fall.

Losses among bond funds were widely felt.

Of the $539.2 billion invested in all mutual funds, $304.9 billion, or 57 percent, were invested in bond and income funds as of August, according to the Investment Company Insti-tute, a trade organization. The figures omit money market funds.

Falling bond prices sent investors scurrying to get out of many funds. Redemptions in August reached $9.6 billion compared with only $4.9 billion a year earlier. The ICI said much of the money went into either stock funds or money market funds.

The biggest single loser among bond funds was Benham Target 2015, a fund that invests in zero-coupon bonds. The fund's value dropped 22.9 percent during the three-month period. A second Benham fund, Target 2010, was down 20.6 percent.

Donald E. Farrar, executive vice president of Benham Capital Management Group in Palo Alto, Calif., discussed the fund's performance while he was visiting in Washington last week.

"It is the nature of the beast," said Farrar, describing the behavior of the zero-coupon fund. The fund, he said, will outperform other fixed-income investments during a bull market in bonds, but will underperform during a bear market in bonds.

Most of Benham Target investors use the fund for long-term accumulation, Farrar said. He noted that funds are low risk for long-term holders but high risk if used for speculation.

Target 2015, formed in September 1986, has had a negative total return of 28.4 percent to date, but Target 2010, formed in March 1985, has had an annualized total return of 17.5 percent.

Science and technology funds showed renewed life in the recent quarter, moving up 7.6 percent. Lipper said most of the gains were attributed to the shares of large high-tech companies, which forged ahead in the stock market, while shares of smaller firms lagged.

International and global funds, strong performers in 1985 and 1986, turned in modest gains in the third quarter. International funds were up 9.4 percent while global funds rose 7.7 percent. That brought the nine-month gains for international funds to 38.6 percent and to 33.2 percent for global funds.

International funds generally invest only overseas while global funds may invest in both the U.S. and foreign countries.

Mutual funds that specialize in stocks of companies headquartered in the Washington-Baltimore-Richmond region trailed the broader market averages by varying amounts.

The best performer was the Growth Fund of Washington, operated by Johnston, Lemon & Co., which gained 6.23 percent.

The Washington Area Growth Fund, run by the Calvert Group, turned in a 3.31 percent performance. And the Southeastern Growth Fund, part of the Wheat, First Securities family, gained 4.65 percent.

Here are the Lipper results of other funds by category: Capital appreciation, up 5.3 percent; growth, up 5.6 percent; small company growth, up 3.7 percent; growth and income, up 4.7 percent; equity income, up 3.2 percent.

Health funds, up 3.3 percent; natural resources funds, up 5.8 percent; utility funds, off 0.04 percent; specialty funds, up 4.5 percent; option growth funds, up 3.6 percent; option income funds, up 3.7 percent.

Convertible securities funds, up 2.5 percent; balanced funds, up 2.5 percent; income funds, off 0.57 percent, and world income funds, off 0.41 percent.