The catalytic oxidation of bio-ethanol to acetaldehyde entails a promising route for valorization of biomass into many important chemicals that are currently mainly being produced from fossil-based ethylene feedstock. We employ here DFT calculations to understand the unprecedented synergy between gold clusters and a MgCuCr2O4 spinel support, which shows excellent catalytic performance for the oxidation of ethanol to acetaldehyde (space-time yield of 311 gacetaldehyde.ggold-1.h-1 at 250°C). The investigations support a mechanism involving catalytic reactions at the gold-support interface. Dissociative adsorption of ethanol is facilitated by cooperative action of a gold atom at the metal cluster-support interface and a basic oxygen atom of the support. The most difficult step is the recombinative desorption of water from the surface. The oxygen vacancy formation energy is found to be a good performance descriptor for ethanol oxidation of Au/MgMeCr2O4 (Me = Cu, Ni, Co) catalysts. It also provides insight into the earlier reported Au-Cu alloy synergy for alcohol oxidation. The high selectivity towards acetaldehyde stems from the facile desorption of acetaldehyde as compared to the cleavage of the remaining a-C-H bond in the product. The opposite holds for methanol oxidation, explaining why experimentally we observe complete methanol oxidation over Au/MgCuCr2O4 under conditions where ethanol is selectively converted to acetaldehyde.