Nanofluids belong to a new class of fluids with supposedly enhanced heat transfer performance. A broad spectrum of applications in science and engineering can potentially benefit from their use. However, the physical explanation for this enhancement, if it exists, is still lacking. The novelty of this work is in a fundamental, realistic, and comprehensive approach to the problem of understanding nanofluids through the use of molecular dynamics simulations with accurate potentials to effectively model realistic materials. Specifically, this study treats the case of a gold-water nanofluid at different particle volume fractions between 1% and 15% by volume. In order to understand more fundamental physical phenomena at the gold-water interface, water confined between gold nanolayers is also studied at different plate separations. Simulations make use of the Quantum Sutton-Chen (QSC) potential for gold-gold interactions, the Extended Simple Point-Charge (SPC/E) forcefield for water-water interactions, and a modified Spohr potential for gold-water interactions. These potentials ensure that most of the physics is captured properly. For completeness, thermodynamics and transport properties will be discussed for all systems. It is interesting to note that while the thermodynamic properties of the mixture have been commonly used in the literature by assuming that the nanofluid is an ideal mixture, such assumption is found to be generally not correct. Our results of computed thermodymamic properties indicate that values are between 10% and 400% different than ideal mixture predictions. Nevertheless, several works in the nanofluids literature make extensive use of such relations in engineering analyses. The anisotropy induced by the gold-water interface, and its effects appear to be responsible for the disagreement. Transport properties, in particular shear viscosity, and thermal conductivity, are computed using novel equilibrium methods. Specifically, the present work adopts hybrid formulations that exploit the benefits of both Einstein and Green-Kubo classic formulations, while avoiding the limitations of each. Transport properties are generally enhanced, and appear not to follow the predictions of classic theories. Interfacial effects, such as liquid layering and acoustic mismatch of pressure waves appear to be the leading factors of the observed anomalies in the thermodynamic and transport properties of the gold-water nanofluids.