GDX is now up 19% in a single week and 40% over the past month — and the borrow market has done something unexpected: it has loosened.
Two days ago, a note filed here described availability collapsing to 55%, with the borrow market flashing its tightest signal in a year. That has since reversed sharply. Availability has climbed back to 125% — meaning roughly five shares are now available for every four already lent out. That is a meaningful shift from the near-squeeze conditions seen on August 21, when availability briefly touched 55%. The change matters because it signals that shorts are continuing to cover rather than new bears pressing in. As positions are returned, lenders get their shares back, and availability rises. The cover trade is still the dominant dynamic.
Short interest confirms this read. It has fallen to 12.2% of the free float — down from roughly 21% a month ago, when the position peaked above 46 million shares. The remaining short book has shrunk to around 36.8 million shares. Cost to borrow, while still rising on a monthly basis (up 98% over 30 days), has actually eased back from last week's intraday high of 0.81% to 0.67%. Borrow is cheap by any historical standard — below 1% — which means no meaningful carry pressure is forcing the remaining shorts to cover. Those still short are choosing to stay.
Options positioning has turned notably more defensive. The put/call ratio jumped to 1.49 on Tuesday — almost exactly two standard deviations above its 20-day average of 1.36, and approaching the 52-week high of 2.06. That is the most protective reading in weeks for an ETF that has just put in one of its strongest monthly performances in years. The implication is that some market participants are paying up for downside protection at these levels, even as short sellers retreat. The options market and the short-covering story are pulling in opposite directions.
Institutional positioning adds texture. The most recent filings show BMO Asset Management holding nearly 5.8% of shares, with Morgan Stanley building a 3.7% position — adding 4.5 million shares in the quarter to June 30. Goldman Sachs moved the other way, trimming its position by 2.5 million shares in the same period. That divergence between large institutions mirrors the broader split: some are adding into the gold miners rally, others are lightening up.
What to watch next: the ORTEX short score has been easing — from 65.8 a week ago to 64.1 today — reflecting the reduced short interest, but the score remains elevated enough that a fresh tightening in availability would quickly change the tone. Whether the put/call ratio continues to climb toward its 52-week high of 2.06, or retreats as the rally extends, is the clearest near-term signal of how seriously options traders are hedging this move.
See the live data behind this article on ORTEX.
Open GDX on ORTEX →ORTEX Market Intelligence content is generated by AI from a snapshot of ORTEX's proprietary data. Content is informational only and does not constitute investment advice.
