Gaughan resumed his solo career and on his next album, "Kist O Gold" (recorded in 1975), he sang mainly traditional songs, using only his guitar as accompaniment. In that year he also recorded two tracks with The High Level Ranters on their album "The Bonnie Pit Laddie". He was, however, becoming frustrated with the folk club scene and keen to work with other musicians, so he joined the Celtic rock band Five Hand Reel. Between 1976 and 1978 the pace of Gaughan's life was hectic. He recorded four albums with Five Hand Reel (three under their own name and one in collaboration with the Danish folksinger Alan Klitgaard), as well as two solo ones: the all-instrumental "Coppers and Brass" (1975), and "Gaughan" (1978), on which he played both acoustic and electric guitars. He also collaborated with Tony Capstick and Dave Burland in an album of songs by Ewan MacColl.