Central banks are quietly selling US government debt and buying record amounts of gold, a bad sign for the dollar's dominance.

• Central banks bought more gold in early this year than in any first quarter on record, and buying has stayed heavy for nearly three years straight.
• A lot of that gold buying is hidden — real numbers, especially China's, may be far bigger than what's officially reported.
• To pay for the gold, they are selling US Treasury bonds, reversing a 50-year habit of parking spare dollars in American debt.
• China alone has dumped hundreds of billions in US debt and moved the money into gold.
• The selling is done slowly and on purpose, so they cash out at good prices instead of crashing the value of what they still hold.

Outlook: Expect the steady, quiet shift out of US bonds and into gold to continue, chipping away at demand for American debt.