Gooch was born in Bedlington, Northumberland, the son of John Gooch, an ironfounder, and his wife Anna Longridge. In 1831 his family moved to Tredegar Ironworks, Monmouthshire, South Wales, where his father had accepted a managerial post, and it was there that Daniel would begin training under Thomas Ellis senior, who together with Ironmaster Samuel Homfray and Richard Trevithick pioneered steam railway locomotion. Gooch wrote in his diaries "Large works of this kind are by far the best school for a young engineer to get a general knowledge of what he needs in after life." and "...I look back upon the time spent at Tredegar as by far the most important years of my life...". He trained in engineering with a variety of companies, including a period with Robert Stephenson and Company, in Newcastle upon Tyne, as a draughtsman. At the age of 20 he was recruited by Isambard Kingdom Brunel for the Great Western Railway, under the title "Superintendent of Locomotive Engines", taking office on 18 August 1837. Whilst working in Newcastle he met his future wife, Margaret Tanner, the daughter of Henry Tanner, a Sunderland shipowner. He stayed in touch with Margaret when he moved south to work for Brunel.
Railway engineer
In Gooch's earliest days with the Great Western Railway, he struggled to keep the miscellaneous collection of broad gauge steam locomotives previously ordered by Brunel in working order. When working at Robert Stephenson and Company, he had helped design two gauge locomotives for the New Orleans Railway, which had never been delivered. Gooch persuaded Brunel to buy the two locomotives, North Star and Morning Star, and had Stephenson convert them to gauge before delivery. As the only reliable locomotives that the company had at that time, they were the basis of the GWR Star Class. He and Brunel improved the blastpipe arrangement of the North Star to improve its fuel efficiency. Eventually Gooch moved on from the Star class and designed the new GWR Firefly Class of 2-2-2 express passenger locomotives, introduced in 1840. In comparative trials by the Gauge Commissioners, Ixion of this class proved capable of speeds greater than its challenger. In 1843 Gooch introduced a new form of locomotive valve gear. In 1840, Gooch was responsible for identifying the site of Swindon Works and in 1846 for designing the first complete locomotive to be constructed there, Great Western, prototype of the GWR Iron Duke Class of 4-2-2 locomotives, which were able to achieve. Much renewed, they lasted to the end of the GWR broad gauge era. Though Gooch's locomotives were principally for the broad gauge, between 1854 and 1864 he also had to design a number of standard gauge classes for the GWR's new Northern Division. In 1864 he resigned from his post of Locomotive Superintendent, though he continued as a member of the GWR Board.
In 1865, while out of the country laying the cable, Gooch was elected Conservative MP for Cricklade. He held the seat until 1885.
Later business activities
In 1866 Gooch was created a baronet in recognition of his cable work. In 1868 he became chairman of the Telegraph Construction & Maintenance Company after John Pender, the first chairman, resigned. He led the Great Western Railway out of near-bankruptcy and took a particular interest in construction of the Severn Tunnel. Final abandonment of the broad gauge did not take place until after his death at the age of 73.