GLD has suffered its sharpest weekly reversal in recent memory, dropping nearly 5% in a week to $411.50 — and the positioning data shows shorts are quietly rebuilding just as options traders have turned their most bullish since January.
The price move marks a decisive shift from the story told in last week's note. A week ago, short sellers were standing down and call-side optimism was running at an unusual pitch. That setup has unwound. Short shares climbed from roughly 9.9 million on May 12 to 10.55 million by May 19 — a 4.5% weekly increase that erases about a third of the April-to-May short covering. The direction of travel has reversed: after five weeks of shorts retreating, the last five sessions have seen a steady, if modest, rebuild. The month-on-month change remains modest at just under 3%, so this is not yet an aggressive short build — but the trend has turned.
The lending market offers little to discourage new shorts. Borrow costs are running around 0.48%, easing slightly on the week and down roughly 10% over the past month. Availability is at 172% of short interest — comfortably in normal territory — meaning there is no shortage of stock to borrow for anyone wanting to add a bearish position. The 52-week low for availability was 22%, so the current reading leaves considerable room before any squeeze dynamic could emerge.
Options positioning tells a contradictory story, and the divergence is worth watching. The put/call ratio has dropped to 0.575 — nearly two standard deviations below its 20-day mean of 0.622, and close to the lowest call-heavy reading in the past year. That means options traders are tilting sharply toward calls even as the price falls and shorts rebuild. The PCR's 52-week range runs from 0.39 to 0.80, and the current reading clusters toward the bullish end. Either options traders are fading the dip aggressively, or the call-heavy skew reflects hedging activity in institutional gold books — the data alone doesn't resolve which.
Institutional holders reflect the divided picture. Morgan Stanley trimmed its position by nearly 3 million shares in Q1 to just over 10.9 million — the largest single reduction among the top holders. JPMorgan and Goldman Sachs moved the other way, adding 860,000 and 290,000 shares respectively in the same quarter. UBS Asset Management added nearly 900,000. The top-15 holder list reads like a roll call of prime brokerage desks rather than conviction-driven gold bulls, which means these flows are more likely to reflect client demand management than directional views on the metal itself.
The ORTEX short score has edged up to 48.6 from around 47.4 a week ago — a mild increase that is consistent with the modest short rebuild, but still firmly in the neutral zone. Nothing in the score signals an extreme positioning event in either direction. What to watch from here is whether the short rebuild accelerates through next week, and whether the call-heavy options skew persists into a further decline — because if both trends continue in tandem, that is the kind of positioning divergence that tends to resolve sharply.
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Open GLD 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.
