There is strong interest in the research & development of the particle/polymer composite technology for functional applications. Current activities are directed towards polymer assisted synthesis of ultrafine metal or semiconductor particles in solution, with an ultimate goal to arrange the particles in a matrix in well-controlled fashion, for possible electro-optical applications. In the present work the optical properties of poly(acrylic acid) polymers containing gold chloride have been investigated. This material system permits synthesis of gold nanoparticles by the reduction of gold chloride. The polyelectrolyte initially forming upon mixture of the reagents shows a gelating behavior. In-situ reduction into gold clusters can be achieved by several ways. Rheological properties, optical absorption/extinction spectra as well as photoluminescence and photoluminescence excitation spectra will be presented and discussed. Different possible combinations of gold ligands and co-ordinations states will be considered in the discussion. Gold may be present in the form of complexes, to the polyelectrolytes, or in form of nanoparticles or larger aggregates depending on the relative concentrations of the reagents and polymer molecular weight.