#Hypnotic mind control
The city is  under the influence of an entity that controls the minds of the inhabitants and makes them think that rocks and dust are actually gold coins. But the inhabitants can't tell the difference between them leaving the influence of the mind control and the gold just turning into rocks and dust.

The inhabitants think that they are wealthy, but they really are not, they're just suffering from a combined delusion. Prices skyrocket in the city and they can't buy food with the gold because the traders won't accept their gold as payment because they know that they can't take the gold home with them. 

Eventually the inhabitants realize that their gold is worthless and that they are as poor as other cities, and they treat gold the same way that they do rocks (worthless), but they appreciate the beauty of their gold rocks. They focus on becoming really wealthy by producing goods that they can actually use like food, clothing, and livestock, instead of focusing on shiny metal that has no practical use. A barter economy develops instead of a currency economy.