The Sparkling Pool is a naturally spawning item introduced in the Hamlet DLC. It can be found in the Painted Biome. Sparkling Pools can be interacted with using a Gold Pan up to 3 times to give a Gold Dust. They can also be drunk by Pangoldens. When that happens the size of the pool visibly shrinks.
There is 20% chance that destroyed Sparkling Pool will reappear again during Rain. Existing Sparkling Pools will always collect rain to eventually refill itself to the third stage. It takes about 3 minutes of rain to refill the pool one stage up.