The disclosure relates to metal nanoparticle compositions and their methods of formation and use, in particular gold nanoparticles (AuNP) and gold-coated magnetic nanoparticles. Compositions according to the disclosure include aqueous suspensions of metal nanoparticles that are stabilized with one or more carbohydrate capping agents and/or that are functionalized with one or more binding pair members for capture/detection of a target analyte. The nanoparticle suspensions are stable for extended periods and can be functionalized as desired at a later point in time, typically prior to use in an assay for the detection of a target biological analyte. The stable nanoparticle suspension can be formed by the aqueous reduction of oxidized metal precursors at non-acidic pH values in the presence of a carbohydrate-based capping agent such as dextrin or other oligosaccharides.