The cost of borrowing SLV shares - the largest ETF backed by physical silver - continues to climb, a sign of a growing imbalance between supply and demand. By the morning of Wednesday July 16, there were virtually no shares left available for rent, reflecting a saturation of the secondary market.
This rise in the borrowing rate indicates that the quantity of shares in free circulation (float) is tightening sharply. In other words, investors are holding on to their shares rather than lending them out, drying up liquidity for short sellers. When the cost of borrowing an asset soars, it's often a sign of a tight market, in which pressure on shorts is increasing and bullish movements can rapidly amplify if a short squeeze is triggered.
This tightening of the float reflects growing confidence in the value of physical silver and increased commitment from SLV holders, who prefer to hold on to their positions despite financial incentives to lend.
The confrontation between these short positions and growing physical demand (visible in EFP spreads or Chinese premiums) promises a fierce battle in the weeks ahead. If the bullish side manages to stay above $37, and neutralize the selling pressure without a sharp pullback, the potential for a short squeeze becomes real, and the next technical target could then be well above $40 per ounce.
![[smilie_blume]](https://goldseiten-forum.com/wcf/images/smilies/smilie_blume1.gif "smilie_blume"){kind=small}
