Dichroic ${\mathrm{Er}}^{3+}$ :Au-antimony glass nanocomposites are synthesized in a new reducing glass (dielectric) matrix (mol%) ${\mathrm{K}}_2\mathrm{O}–{\mathrm{B}}_2{\mathrm{O}}_3–{\mathrm{Sb}}_2{\mathrm{O}}_3$ (KBS) by a single-step melt-quench technique involving selective thermochemical reduction principle. Transmission electron microscopic images reveal hexagonal ${\mathrm{Au}}^{\mathrm{o}}$ nanoparticles having major axes about $9–23\mathrm{nm}$ . Dichroic behavior arises due to hexagonal ${\mathrm{Au}}^{\mathrm{o}}$ nanoparticles of aspect ratio 1.2–1.3. ${\mathrm{Au}}^{\mathrm{o}}$ nanoparticles of concentration of $0.03\mathrm{wt}\%$ $(4.1\times {10}^{18}\text{\hspace{0.17em} atoms}∕{\mathrm{cm}}^3)$ drastically enhances the intensity (2–5 folds) of both 536 ( ${}^4\mathrm{S}_{3∕2}\to {}^4\mathrm{I}_{15∕2}$ , green) and 645 ( ${}^4\mathrm{F}_{9∕2}\to {}^4\mathrm{I}_{15∕2}$ , red) nm emission bands of ${\mathrm{Er}}^{3+}$ . Local field enhancement induced by ${\mathrm{Au}}^{\mathrm{o}}$ surface plasmon resonance (SPR) and energy transfer from fluorescent ${\mathrm{Au}}^{\mathrm{o}}\to {\mathrm{Er}}^{3+}$ ions are found to be responsible for enhancement while, at very high Au concentration, energy transfer from ${\mathrm{Er}}^{3+}\to {\mathrm{Au}}^{\mathrm{o}}$ and optical reabsorption due to ${\mathrm{Au}}^{\mathrm{o}}$ SPR result in quenching.