Gold was found at Araluen by Alexander Waddell in September 1851. Thousands of people came to Araluen to look for gold during the gold rush. This included many Chinese gold miners. One of these miners was Quong Tart who came to Araluen when he was only nine years old. He later became a famous business man in Sydney. In the 1860s there were more than 20 hotels in Araluen. The gold was alluvial gold, found in the bottom of the creeks. In some places there was up to 12 metres of dirt and sand on top of the gold. In the 1870s the gold miners used hydraulic sluices (high pressure water hoses) to wash away all the sand and dirt. Big floating dredges (digging machines) were put in the creek. There were 11 there in the 1900s. The last dredge stopped working in 1932.