NEW YORK (
The SPDR Gold
, a popular gold ETF, and
were among the
New York Stock Exchange
-listed tickers that saw a notable increase in short interest in the first half of May, according to data released by the exchange Tuesday afternoon.
GLD short interest rose to nearly 29 million shares, from about 14 million shares during the prior reporting period. The surge is short interest carried GLD into the 100 most-shorted tickers on the NYSE for the first time since at least January, which is as far back as my data go.
Short-sellers borrow shares in the hope of buying them at a lower price in the future and pocketing the difference.
Fears high debt levels both in Europe and the U.S. could erode the value of those currencies have driven gold prices to record levels, and GLD's recent peak on May 12 of $122.24 is the highest level in its history. Other issues, such as a recent
, have also been cited as a factor in the rise of the precious metal. Gold mining stocks also have climbed higher and indeed
, an Idaho-based precious metals dealer, also appeared on the list of the top 100 NYSE-shorted tickers.
Still, tempting though it is to conclude that a rise in short interest may be a sign of a top, there is little evidence to support such a view. Instead, a rise in short interest is often merely a signal of increased overall activity in a stock. Overall volumes in GLD surged dramatically on the long side in late April and into May, as fears over the euro picked up, and spiked higher in particular during and after the May 6 flash crash.
, perennially the most-shorted ticker symbol on the NYSE, is also the most actively traded name on the long side. Citigroup stock rose sharply during several stretches in late 2009 and early 2010 even as
short interest climbed steadily
during that period.
The increase in Wells Fargo short interest is notable because it brought short interest in the San Francisco-based bank to the highest level since at least January. Short interest in Wells Fargo climbed to 66 million shares, from 56 million in the second half of April.
Wells Fargo was one of the best performing big bank stocks in the first half of May as the factors that hurt other large banks, such as tougher derivatives rules or European debt fears,
seemed less relevant to Wells Fargo
. But Wells Fargo's stock has lagged its peers this week following a downgrade on valuation from Goldman Sachs.
Written by Dan Freed in New York