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we have not run out but in today's age there is less than 1 % of the population that hold, most of us holders have more than 1 oz and we will not give them up so easily. There will be enough to back a currency with it by increasing it's physical value for sure but there wont be enough for all of the population to trade with daily or convert their current cash holdings into it in a short period of time.

You need to get out of the mindset we have here today. We donnot have a free market system. In a truely free market it will be hard to run out of almost anything because the laws of supply and demand takes care of that. So in a free market you will not run out of gold it will simply be priced accordingly. You have silver, platnum, paladium, copper, nickel, tin, need I go on?