  The Faraday rotation in metallic nanoparticles is considered based on a
quantum model for the dielectric function \epsilon(\omega) in the presence of a
DC magnetic field B. We focus on effects in \epsilon(\omega) due to interband
transitions (IBTs), which are important in the blue and ultraviolet for noble
metals used in plasmonics. The dielectric function is found using the
perturbation of the electron density matrix due to the optical field of
incident electromagnetic radiation. The calculation is applied to transitions
between two bands (d and p, for example) separated by a gap, as one finds in
gold at the L-point of the Fermi surface. The result of the DC magnetic field
is a shift in the effective optical frequency causing IBTs by $\pm \mu_B B /
\hbar$, where opposite signs are associated with left/right circular
polarizations. Faraday rotation for a dilute solution of 17 nm diameter gold
nanoparticles is measured and compared with both the IBT theory and a simpler
Drude model for the bound electron response. Effects of the plasmon resonance
mode on Faraday rotation in nanoparticles are also discussed.
