GLD shorts begin to retreat as the lending market reopens

The story that defined GLD for the past two weeks is now running in reverse: the short squeeze that seized the gold ETF's borrow market in late October is unwinding, and the data shows a broad, coordinated retreat by short sellers even as the price continues to slide.

Short interest has fallen sharply from its recent peak. At 17.6 million shares as of November 3, it is down nearly 5% on the week and off about 7% from the 18.9 million peak reached on October 30. That peak was itself the product of an extraordinary build: two weeks ago, short interest roughly doubled in a matter of days, a move ORTEX put at 5.5 standard deviations above GLD's typical weekly change. The unwind is now underway, though positions remain roughly 40% higher than they were a month ago, so the short base has not fully cleared.

The borrow market's recovery is the clearest sign that the squeeze pressure from late October has passed. Availability was at 59% on October 29, the tightest reading of the past 52 weeks, with almost every available share in the lending pool already out on loan. By November 3, availability had recovered to 177%, meaning lenders now hold nearly two shares available for every one borrowed. The cost to borrow has followed: at 0.52%, it is down 13% on the week, back toward the low end of its recent range after briefly touching 0.71% last week. The ORTEX short score tells the same story, easing to 52.9 from a peak of 56.5 on October 29. The composite signal is declining as borrow conditions loosen and short demand pulls back.

Options positioning offers a contrasting read. Call-side demand is running slightly above put-side demand. The put/call ratio is 0.48, a touch below its 20-day average of 0.50 and close to its flattest reading in weeks. That is a mild call tilt by GLD standards, sitting around 0.7 standard deviations below the recent mean. The 52-week range runs from 0.39 to 0.70, so the current level is neither extreme. Options traders are not positioned defensively despite a price that has fallen 5.5% over the past month to $359.26.

Analyst data for GLD is not usable: the available price target dates to 2008 and bears no relation to the current price or structure of the ETF. On institutional ownership, the register is broadly stable. Morgan Stanley holds the largest disclosed position at around 3% of shares. BlackRock added 1.53 million shares in the most recent quarter, the biggest incremental move among the top holders. No activist filings are on record.

The price context matters here. GLD is down 3.5% on the week and 5.5% over the past month. The short build in late October happened into that weakness, and the partial unwind this week has not coincided with any price recovery. What to watch now is whether the remaining elevated short base continues to unwind as the price finds a floor, or whether fresh short selling resumes if gold's decline extends further.