The objective of this paper is to statistically analyze whether gold is a better choice as reserve currency for smaller market economies using the Vector Auto Regression (VAR) model. This study involves the gold price movement relative to 5 selected equity indices price movement namely 3 in major market economies –DJIA in US, FTSE in UK, and NIKK in Japan – and 2 from the smaller emerging market economies – KLCI in Malaysia, and IRTS in Russia for a span of 15 years. This paper also attempts to identify the endogeneity and exogeneity of the variables under study. The policy implication from our study, in fact, answers our main research objective that YES, gold is a better currency in reserve baskets. And for this very reason also, there is a need to restore gold as the standard international payment system (Askari and Krichene, 2014). The usage of gold in the international Islamic gold standard serves as the natural foundation of money which safeguards against governments’ debasement of money and inflationary deficits. It removes the major source of instability, which is interest-based credit and the major cycles of crisis it brings. Hence, only risk and uncertainty which is a part of nature, enterprise and investment remains