Absolutely not allowed on Fraser, take your long rods snorkel and 4wd don't disturb the fauna there's enought pommy backpackers ruining lake mckenzie washing there hair I'n the lakes without us digging it up
Fraser island is world heritage listed and very fragile. I was fortunate enough to go there for a few days about 15 years ago. It's really is a beautiful spot. If you do go please take care not to destroy any of the flora there and don't feed the dingos (apparently they are the most pure bred dingoes in Australia because they haven't interbred). Anyway people feeding them causes problems because it encourages them to approach humans, plus the food tourists give them isnt great for their overall health.
Although you can't fossick what you could do is take your gold to the lake there and use its ultra fine sand to polish them up nicely.