The kinetics of the H2-O2 reaction over Pd, Pd70Au30 and Au (111)-oriented surfaces has been studied in a static reactor near room temperature, using pressures in the torr range. The Pd-Au surface is highly enriched in gold (75 at.%) and unreconstructed, as shown by previous AES, LEIS and LEED analysis. While Au(111) is inert, Pd(111) and Pd-Au(111) are very active to catalyze the oxidation of hydrogen. The clean Pd surface is firstly more efficient to form water than the Pd-Au surface, but deactivates upon exposure to the reactive mixture. A careful analysis of the reactant partial pressures allows deriving the amount of hydrogen absorbed in the crystal during each reaction cycle. This shows that Pd-Au absorbs much more hydrogen than Pd, and that bulk dissolution directly competes with surface oxidation of hydrogen. Gold-induced lowering of the oxygen sticking probability and absorption-induced structural modification of Pd(111), through formation of a surface hydride, are invoked to rationalize the results.