A simple approach for the synthesis of gold coated iron oxide nanoparticles as well as its structural, morphological, magnetic and optical study have been discussed in the light of different techniques. Morphology of prepared particles by scanning electron microscope (SEM) and structure of Iron Oxide by XRD analysis have been explained. Optical and magnetic behaviour of pure gold (Au) and Fe2O3@ Au core shell nanoparticles have been discussed using Uv-Vis Spectroscopy & VSM respectively. These core shell nanoparticles are useful in targeted drug delivery system.