A stable gel of Au nanoparticles in polydimethylsiloxane (PDMS) nanocomposite is prepared by employing the curing agent of PDMS elastomer as a reducing agent for the formation of Au nanoparticles by an in-situ process. The viscoelastic nature of these gels is very sensitive to the Au nanoparticle loading and the synthetic temperature conditions. Even a very low Au content of 0.09 wt% is sufficient enough to bring in the transition from sponge state to gel state at room temperature. Higher synthetic temperature also forms sponge formation. Infrared and ultraviolet–visible spectroscopy measurements have provided insight into PDMS crosslinking and nanoparticle formation, respectively. The optimization of the gel properties can have direct influence on the processability of Au nanoparticle–PDMS nanocomposite gels, with interesting implications in electronic, optical and microfluidic devices.