Gold prices punched through another record this week, with spot gold trading above $2,900 an ounce and futures briefly touching $2,950.
If you've seen the breathless headlines, you'd think everyone holding a coin is getting rich.
The math is less flattering for most Americans.
Start with the obvious: you probably don't own gold.
Fewer than one in five US households hold any physical bullion or gold-backed fund, and most of that sits in retirement accounts or a drawer somewhere.
If you're not in that group, a record gold price doesn't put a dollar in your pocket — it just makes the commercials louder.
The people celebrating are the ones selling to you.
Coin dealers are paying roughly 5% to 10% below spot when they buy and charging 10% to 25% above spot when they sell.
Gold IRA companies, meanwhile, often wrap the metal in fees that can eat 1% to 2% a year, plus setup costs that can run into the thousands.
Walk into a pawn shop or a "we buy gold" store with a one-ounce coin and you'll typically be offered somewhere between 70% and 90% of the spot price, depending on how desperate the shop thinks you are.
The record number you saw on television isn't the number on the counter.
China, India, Turkey, and others have been buying aggressively for years, partly to reduce reliance on the dollar.
Add in geopolitical anxiety, sticky inflation expectations, and traders betting the Federal Reserve will keep cutting rates.
Gold pays no interest, so it tends to look better when rates fall — and worse when they rise.
It fell roughly 20% between 2011 and 2015 and took nearly a decade to get back to its old high.
Anyone who bought at the top of the last craze waited a long time to break even, while inflation quietly ate their gains.
If you're thinking about buying anyway, a few rules of thumb help.
Keep gold a small slice of your portfolio — most financial planners who use it suggest no more than 5% to 10%.
Compare premiums before you buy anything, and ask specifically what the dealer pays when you sell.
Skip the "limited-time" TV offers and the salespeople who call you at home.
And be skeptical of anyone promising gold is a safe haven right now.
Nothing that moves this fast in one direction is safe in both directions.
The record price is a headline, not a plan.
The folks making real money today are the ones collecting spreads and fees from everyone who read that headline and panicked.
Our take: gold can be a reasonable hedge, but it's not a lottery ticket and it's not a shortcut to wealth.
If a record price is your reason to buy, you're probably buying at the wrong moment.
Final Thoughts
The sellers know that better than you do.