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Carlos Slim bets on gold

Tuesday, October 16, 2012

Whenever Carlos Slim makes a significant move in the markets, investors take notice. Slim’s fortune is not only the world's biggest, but also the fastest-growing.

Earlier this month, Slim's mining company, Frisco, spent $750 million to acquire the Ocampo mine in Mexico from Canada's AuRico Gold, along with stakes in associated projects.

On one level, Frisco, which was spun off from Slim's Carso holding group last year, appears to be following the growing trend of acquisitions of companies in Europe and North America by the so-called multi-latinas. Mexico's Grupo Bimbo, now the biggest baker in North America, is a prime example.

But Slim often opposes trends, as opposed to following them.

Frisco’s move could be part of a long-term pattern of acquisitions by multi-latinas.

Or Slim may be anticipating that the economies of the United States and Europe will continue to be troubled, and that this in turn results in low profits for his Latin American-based consumer businesses.

In this case, the price of gold could move up from the plateau of around $1,500, from which it has scarcely moved during the past year.
Others can guess. Only Slim knows.