This paper reports a study on plasmonic properties of gold nanoparticles to detect the presence of formaldehyde solution in water. Gold nanoparticles were grown on substrates by the seed mediated growth method. A sensor system was setup, comprises a light source, a dual arm fibre optic probe, a spectrometer and sensor chamber. The detection of formaldehyde was done by comparing the Localized Surface Plasmon Resonance (LSPR) spectra of gold nanoparticles samples immersed in the deionised water and formaldehyde solution. It was observed that the peak position LSPR spectra of nanogold samples and their intensity were change by the presence formaldehyde. The difference between resonance peak intensity of LSPR spectra gold nanoparticles sample in formaldehyde solution and water can be used as sensing sensitivity parameter of the sensor. It was found that the sensing sensitivity is increase with the size of nanoparticles until it reach the optimum particles size.