The disclosure relates to a plasmon resonance-based method for H2 sensing in a gas stream at temperatures greater than about 500° C. utilizing a hydrogen sensing material. The hydrogen sensing material is comprised of gold nanoparticles having an average nanoparticle diameter of less than about 100 nanometers dispersed in an inert matrix having a bandgap greater than or equal to 5 eV, and an oxygen ion conductivity less than approximately 10−7 S/cm at a temperature of 700° C. Exemplary inert matrix materials include SiO2, Al2O3, and Si3N4 as well as modifications to modify the effective refractive indices through combinations and/or doping of such materials. At high temperatures, blue shift of the plasmon resonance optical absorption peak indicates the presence of H2. The method disclosed offers significant advantage over active and reducible matrix materials typically utilized, such as yttria-stabilized zirconia (YSZ) or TiO2.