Yes, central banks may sell gold, but for every seller there's a buyer. Falling confidence in paper money is reflected in a rising gold price. That's what happened in Southeast Asia in 1997-98. Rising confidence in paper money is reflected in a falling gold price. That's been the trend in the US and UK in recent years.
Much attention is paid to a loss of confidence in paper money due central bank over-issuance.
But Treasury policy is also important in affecting demand for paper money. Inc. All rights reserved. Inc. All rights reserved.