The clanging of horseshoes represents the loss of innocence.
Horseshoes is a simple game that the men on the ranch would play to pass the time, and likely they would gamble on the outcome. Throughout this chapter, Steinbeck juxtaposes the sounds of the horseshoes game outside the barn with Lennie and the puppy or the girl. Lennie is a large man who possesses a childlike innocence. He is about to lose that innocence. It does not mean that he intentionally does anything wrong. However, from now on, he is about to face consequences of his actions.
Initially, Lennie accidentally kills a puppy. He loves to stroke soft things. He is not capable of being gentle, unfortunately. He kills the puppy by petting it too hard.
From outside came the clang of horseshoes on the iron stake, and then a little chorus of cries. Lennie got up and brought the puppy back and laid it on the hay and sat down. He stroked the pup again. (Ch. 5)
This is foreshadowing. The consequences of killing the puppy are not so great. He is afraid he will get in trouble for killing the puppy, because George or someone else will be mad at him. However, he is about to be in trouble for something much worse. As the horseshoe game goes on outside, Curley’s wife wanders in. She is lonely, and sees Lennie. She has pretty hair, and he can’t help himself. He wants to stroke it.
Lennie accidentally kills Curley’s wife. He breaks her neck touching her hair. He does not mean to, just like he did not mean to kill the puppy. However, the fact that he didn’t mean to kill her will not make a difference. Lennie can no longer escape consequences any more. He longer will be treated like a child any more. He longer will be carefree. This is the reason why Steinbeck emphasizes the horseshoe game, which Lennie is not participating in. It would have been better if he had.
As Lennie leaves, you can once again hear the sound of horseshoes, and Lennie puts the dead pup under his coat.
He put the pup under his coat, and he crept to the barn wall and peered out between the cracks, toward the horseshoe game. And then he crept around the end of the last manger and disappeared. (Ch. 5)
Soon, George will have to make the ultimate choice about Lennie. His time is up. Horseshoes are supposed to be a symbol of luck, but Lennie gambled for his last time.
George chooses to shoot Lennie because he decides that it is better that he does it than if someone else kills him, or if he gets arrested and ends up in the justice system. Lennie would not understand what was happening to him if someone else caught him. George realizes that by killing him himself, he can protect him just long enough so that he doesn't know what hit him and put him out of his misery. It is the least he can do.