Gauley's family immigrated to the United States in 1885. He studied painting in Cambridge, Massachusetts, with the color theorist Denman W. Ross and also attended the School of the Museum of Fine Arts, Boston, where he worked under Frank Benson and Edmund Tarbell. Gauley continued his studies with William-Adolphe Bouguereau and Gabriel Ferrier at the Académie Julian in Paris.
Although Gauley established a studio in New York's Van Dyck Building, he lived primarily in Boston. He received numerous awards, including at the Paris Exposition Universelle of 1900, the Pan-American Exposition in Buffalo of 1901, and the Louisiana Purchase Exposition in Saint Louis of 1904.