Gold was discovered east of Custer during the Black Hills Expedition, conducted by the 7th Cavalry led by Lt.

Colonel George Armstrong Custer, a discovery which initiated the Black Hills Gold Rush.

Having established dominance in the area by the eighteenth century, the Oglala Sioux had long considered the Black Hills as sacred land.

[citation needed] After increasing encroachment by Americans and violent confrontations, the U.S. government forced the Sioux to cede much of the Black Hills in 1877, and opened the land for individual purchase and settlement.

[9] Almost abandoned in 1876 after word of the much larger gold strikes in Deadwood Gulch spread, Custer later became an established city.

[citation needed] Custer has had a smaller population and been less wealthy than the Northern Hills cities of Deadwood and Lead.

[citation needed] Custer annually observes a "Gold Discovery Days" celebration and festivities over the last full weekend of July.

This heritage tourism event celebrates the embezzlement of gold by the Custer expedition in nearby French Creek and the subsequent founding of the town.

[10] Custer has a humid continental climate (Köppen Dfb/Dwb) with summers featuring very warm afternoons and cool mornings, and cold, extremely variable winters.

Custer's altitude makes summers much milder than in the Great Plains proper: only seven afternoons rise above 90 °F (32.2 °C) and 100 °F (37.8 °C) has been reached only once in 1954.

A steady stream of tourists year round and those attracted to the annual Sturgis Motorcycle Rally add much to the economy and seasonal population of the city.

With the closing of the nearby sawmill and local mining company, tourism and hospitality services form the mainstay of the economy.