The high-temperature solution phase reaction of iron(III) acetylacetonate, Fe(acac) 3 and 1,2-hexadecanediol was used to synthesise iron oxide and gold-coated iron oxide nanoparticles. Different surface functionalities, such as sebacic acid (SA) and 1, 10-Decanediol (DD), were introduced on the surface of the particles to investigate the stabilising effect of carboxylic groups (SA) in comparison to the hydroxyl groups (DD). Nanoparticle thermal stability, composition, state of aggregation, size and morphology were investigated and the results from techniques such as Fourier Transform-Infra Red spectroscopy (FT-IR), Ultraviolet visible spectroscopy (UV-vis), Transmission Electron Microscopy (TEM) and thermal analysis are discussed.