Connecting to postgresql from python 3, running in Cloud Shell: password authentication failed

I'd recommend using the Cloud SQL Python Connector to manage your connections and best of all you won't need to worry about running the proxy manually. It supports the pg8000 postgresql driver and can run from Cloud Shell.

Here is an example code snippet showing how to use it:

from google.cloud.sql.connector import connector
import sqlalchemy

# configure Cloud SQL Python Connector properties
def getconn() ->:
    conn = connector.connect(
        "xxxxxxxx:us-central1:testpg",
        "pg8000",
        user="YOUR_USER",
        password="YOUR_PASSWORD",
        db="YOUR_DB"
    )
    return conn

# create connection pool to re-use connections
pool = sqlalchemy.create_engine(
    "postgresql+pg8000://",
    creator=getconn,
)

# query or insert into Cloud SQL database
with pool.connect() as db_conn:
    # query database
    result = db_conn.execute("SELECT * from my_table").fetchall()

    # Do something with the results
    for row in result:
        print(row)

For more detailed examples refer to the README of the repository.