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There is a lot to make of the action in the gold market over the last week as the precious metal touched on its lowest level since July of 2011. Over the course of the day on Friday, the asset that over the last few years had been perceived as a safe haven for capital in an unguided global economy lost over 4 percent (or almost 80 dollars an ounce). Furthermore, there was sustained selling throughout the day as no bottom has seemed yet to appear. This selloff though, can really be attributed to three main events over the past week, and the rationale behind them will continue to influence the market in the months to come.

The first is based on the sentiment of investment banks and institutional investors. It seems for many, after this decade long run it might be time to take a profit, and this increased coordinated selling definitely puts downward pressure on prices, especially for investors that follow the herd. Too many analysts are calling this the end of the commodities super cycle, and although there is a remote chance it could be, this helps to explain why we are seeing a selloff in gold that is also linked to other commodities like oil and cooper. But as Goldman Sachs seemed to be inspired by the bearish initiative of Societe Generale the week prior, earlier this week they followed suit by presenting a bearish case for gold themselves that had many analysts attributing this as the catalyst for the further move downward. For a bank that had the reputation for being advertently bullish on the metal, this came as a bit of a surprise.

The second contributing factor to the selloff in the gold market this week was Cyprus announcing the potential sale of a portion of their holdings. And well this small crisis hit country would in the scheme of things not have that great of an impact on price as they bring bullion to the market, it is the revelation that the Euro crises is far from over. Furthermore, it’s not just the Central Bank of Cyprus that could sell their gold holdings to turn profits from the sale over to their respective governments; it’s the fear that the likes of Portugal, Spain, and Italy might do the same.

Also in Europe, there will be elections in Germany where there lays the risk of the tolerant Angela Merkel being turfed from office. And although the Germans have become associated with the painful austerity themed budgets across bailed out EU nations, any successor to Chancellor Merkel can be seen as a potential end for the Euro. And this is as the common German fails to recognize they’ve been beneficiaries of a weak exchange rate, but more importantly from their perspective they’re the purse for irresponsible neighbor countries. Over the last few years though, as gold has benefited from a risk on trade with the Euro, weakness in Europe would not be good for gold.

The third and perhaps paramount event stays with the most important central bank in the world. The Fed released minutes from their most recent FOMC meeting where a continued number of district bank presidents look to reign in or end asset purchases by the end of this year, and one believes even as early as this summer. Putting aside the unanswered questions of rising long term interest rates and the impact that has on their balance sheet or for that matter the interest payments from the US Treasury, the Fed’s job is to be bias. It is within their role to convince market participants that we are well into a recovery so that consumption and investment levels are restored and firms will continue to hire. To make one bullish prediction, gold’s next big move will be when QEIII doesn’t end in the manner many are hoping for.

The Comex has had net long positions in gold for more than a decade; they are starting to decrease. I’ve talked about the role gold plays in a central banks Forex reserves to diversify against the dollar, but as Cyprus just recently reminded us, it serves a role in crises as well. The most recent FOMC minutes showed the US Fed sees continued hiring and moderate improvement in the US economy. Put those three together and it’s a fairly ugly week for gold.