The naked short selling certainly has something to do with it. But it takes more than that.It also requires real selling. The selling occurred in the ETF's by new "investors" who bought into gold because it had been going up. These people didn't really understand why they should own gold -as insurance and a store of value-and sold prompted by the drop in price and the media constantly proclaiming the end of the bull market in gold and precious metals.
I wrote this blog post to explain why gold is not an investment, but rather an asset.