Here we numerically demonstrate a straightforward method for optical detection of hydrogen gas by means of absorption reduction and colorimetric indication. A perfectly absorbing metal-insulator-metal (MIM) thin film interference structure is constructed using a silver metal back reflector, silicon dioxide insulator, and palladium as the upper metal layer and hydrogen catalyst. The thickness of silicon dioxide allows the maximizing of the electric field intensity at the Air/SiO2 interface at the quarter wavelengths and enabling perfect absorption with the help of highly absorptive palladium thin film (∼7 nm). While the exposure of the MIM structure to H2 moderately increases reflection, the relative intensity contrast due to formation of metal hydride is extensive. By modifying the insulator film thickness and hence the spectral absorption, the color is tuned and eye-visible results are obtained.