ALL that glitters is most definitely not gold, according to at least one fund manager who is advising investors to avoid the metal and go for the gold-miners instead. James Leslie, director of Guinness Flight Asia, part of the Guinness Flight Unit Trust Centre, said the actual profits from a rise in the gold price, at present hovering about US$392.73 to $393 an ounce, could be leveraged if investors went for gold-miners instead of gold. And gold remained a hedge against inflation for those concerned about the US economy overheating. 'The fundamental point is there is a lot of chat about gold - will it go up to $400 an ounce, $410 an ounce? People are asking themselves, should they buy gold? That's crazy. They should buy shares in the miners because there are major profits for gold-miners from relatively small increases in the price of gold.' Last year, the gold price rose from $330 to $390, an increase of 18 per cent. Over the same period, the Guinness Flight Global Gold Fund, which invests only in gold-miners, rose 130 per cent, he said. Last year, prices for the precious metal were volatile, peaking at $405 and dipping to just under $350, but Mr Leslie believes the recovery seen this year in the gold price is more orderly and sustainable, especially with inflation concerns in the US on the rise. The price has neared $400 recently, a key psychological level. According to data supplied by the World Gold Council, demand in India in the quarter to 30 was 99.8 tonnes - including bars, coins, and high-carat jewellery - up 17 per cent on the previous three months and up nine per cent on the same period last year. Plans to re-establish Bombay as a bullion trading centre, and a cut in tax on bullion from 3.75 per cent to 0.5 per cent, should underpin the market on the sub-continent. Although demand was down in China because of the austerity measures, Southeast Asia was robust, with Thailand growing 55 per cent in the June quarter and South Korea growing 63 per cent over the same period last year, the council said in its most recent report. The council also said recently that gold prices seemed destined to go up rather than down. In the September quarter, Guinness Flight's Global Gold Fund rose 20 per cent (on an offer-to-offer basis), against four per cent in the price of gold, and gold shares have significantly outperformed bullion during August. 'The profitability of gold-mining companies is very highly geared to the gold price,' he said. 'South Africa mines its gold very deep and is the most expensive producer at around $330 to $350 a troy ounce. 'So at a gold price of $380, a producer with costs of $330 makes $50 an ounce. But if the gold price rises to $400, his profit is $70 an ounce - an increase of 40 per cent. 'If the gold price rises to $430 - an increase of 13 per cent from $380 - then his profit doubles.' South African mines were the best bet for the moment, he said. The fund has more than 50 per cent of its gold-mining portfolio in South Africa. The fund has 47 per cent of its asset allocation in South Africa, 16 per cent in Canada, 15 per cent in Australasia, four per cent in the US, four per cent elsewhere and 14 per cent cash. Inflation fears should underpin gold. Data last week from the US suggested inflationary pressures were increasing. Mr Leslie said equities had yet to match bond losses, and investing in gold shares also provided a counter-balance for those predicting a further shake-out in share prices. ''Equities are unlikely to do much until bond prices stabilise and that's unlikely to happen until rates go up by 100 basis points [one percentage point].''