SLV fund exactly tracks the price of silver because the fund managers force SLV to track the ups and downs of silver.
When SLV is being oversold harder than silver itself, then SLV managers are forced to buy-back SLV shares to prop the price up to stay equivalent to the price of silver itself. When SLV is being overbought (pushing prices higher than silver itself), then the managers are forced to sell additional new shares to bring the price of SLV shares down to stay equivalent to the price of silver.
When they have to buy-back shares from sellers, they get this money by selling silver, and buying shares. This silver hits the market and causes an additional glut of silver.