"the fractional reserve nature of gold has existed for centuries if not thousands of yrs"
Yep, and so have bank runs. Never seen a global one before though. Its going to be pretty epic!
"Rising prices are doing their job bringing gold to market"
Gold is a Giffen Good. The more the price rises, the more it is "consumed" or saved, contrary to almost all other goods. That's because it confirms savers belief that it is a good store of wealth.
The last time large amounts of saved gold came on to the market was the period 1981 to 2000, when the price was falling. Savers and central banks sold gold because it was not (perceived) to be doing it's job. It went (Middle) East, to pay for oil.
The price may not run up smoothly from here. It may hit a disconnect where the price of unallocated gold separates from allocated gold, a rush to move from paper to physical. A run on the bullion banks. Its quite possible that this has already started.