The magnetic properties of dodecanethiol-capped gold (Au) nanoparticles (NP) embedded in polymeric matrix, were investigated. The UV-vis optical absorption of the NPs were analyzed to determine the surface plasmon resonance (SPR) of NPs. Dodecanethiol-capped Au NPs were prepared by reducing using a solution of sodium borohydride in toluene in the presence of an aliphatic thiol (dodecyl mercaptane). Polymeric Au nanocomposites were prepared by casting a solution of 4 wt % Au NPs and ultrahigh-molecular-weight polyethylene. Magnetic characterization of the samples was carried out with superconducting quantum inference device (SQUID) magnetometer. It was observed that magnetic moment of NPs overcomed the diamagnetism from the PE matrix and the inner core of the Au NPs for fields below 4000 Oe. Result shows that ferromagnetism can be induced in gold by reducing the particle size to nanoscale level and capping the nanoparticles with dodecanethiol.