Development of a stable and highly active metal oxide based electrochemical supercapacitor is a major challenge. Herein, we report a Au−Fe 2 O 3 nanocomposite having tiny amount of gold (3 atomic % Au) by employing a simple redox-mediated synthetic methodology using a modified hydrothermal system. Structural and morphological studies of the synthesized Au−Fe 2 O 3 nanocomposite have been performed both experimentally (XRD, IR, Raman, XPS, TEM, and FESEM analyses) and theoretically (WIEN2K). A probable dissolution−nucleation−recrystallization growth mechanism has been suggested to explain the morphological transformation from a Fe 3 O 4 nanoflake to a Au−Fe 2 O 3 nanorod. We have observed the superior chemical stability of the Au−Fe 2 O 3 nanocomposite in an acidic medium due to composite formation. The electrochemical measurement of the synthesized Au−Fe 2 O 3 nanocomposite exhibits specific capacitance of ∼570 F g −1 at the current density of 1 A g −1 in 0.5 M H 2 SO 4 electrolyte. The result is superior compared to the mother component, i.e., Fe 2 O 3 (138 F g −1 ), under identical conditions. It is credited to its higher specific surface area and composite effect. Theoretically, a decrease in band gap associated with increase in conductivity supports the superiority of the Au−Fe 2 O 3 nanocomposite compared to the mother compound, i.e., Fe 2 O 3 . In addition, electrochemical kinetic analysis showed that the charge-storage mechanism is mostly from a dominant capacitive process (78% at 1.5 mV s −1 ). A solid-state asymmetric supercapacitor device has been fabricated using a synthesized Au−Fe 2 O 3 composite nanorod as the positive and activated carbon as the negative electrodes. The asymmetric solid-state device exhibits a maximum energy density of 34.2 Wh kg −1 and power density of 2.73 kW kg −1 at current densities 1 A g −1 and 10 A g −1 , respectively. Thus, the synthesized nanocomposite shows excellent activity as a supercapacitor with long-term durability (91% capacitance retention) up to 5000 cycles even in an acidic medium.