Wiki - Gold Panning & Smelting
Craft Gold Pans from the Tinkering menu and use them on water from shore to gather Gold Nuggets.
Small, Medium and Large Gold Nuggets can be panned up.
The old gold panner, Johnson, can be found in most towns at the doc. He will exchange your gold nuggets at the following rates.
1 Medium for 5 Small
1 Large for 3 Medium
1 Brick for 2 Large
1 Bank Check (10k gold) for 2 Bricks
A tidy fortune can be made from panning alone.
Gold Tongs can be Crafted from the Tinkering Menu. Use them, and Blacksmithy, with Large Gold Nuggets to create many things.