"'You looked, O king, and there before you stood a large statue - an enormous, dazzling statue, awesome in appearance.'" NIV translation
Daniel begins to tell the king his dream and we see that the dream was of a rather large statue. The Babylonians were very familiar with statues as they were everywhere to be seen and so we see that God is communicating with the king in a way that he will understand. In the same way, God communicates with each and every one of us through the power of the Holy Spirit. We see that this statue was so impressive that it was scary as it was distinguished from the statues that the king would see every day.
Daniel describes the statue to the king and we see a downward spiral from the most valuable of materials to the least.
Throughout the Bible, gold is associated with divinity and so we also see a progression away from God and to the efforts of men (clay).
"While you were watching, a rock was cut out, but not by human hands. It struck the statue on its feet of iron and clay and smashed them. Then the iron, the clay, the bronze, the silver and the gold were broken to pieces at the same time and became like chaff on a threshing floor in the summer. The wind swept them away without leaving a trace. But the rock that struck the statue became a huge mountain and filled the whole earth." NIV translation
What a wonderful picture this is of the coming millennial reign of Jesus Christ (see Revelation 20)! Jesus was described as "the stone you builders rejected" (Acts 4:11) by the apostle Peter as well as by the psalmist in Psalm 118:22. This stone was the Son of God but most rejected Him in favor of their own efforts to please God. As we see here, man's efforts to build on their own will be destroyed.
"'This was the dream, and now we will interpret it to the king. You, O king, are the king of kings. The God of heaven has given you dominion and power and might and glory; in your hands he has placed mankind and the beasts of the field and the birds of the air. Wherever they live, he has made you ruler over them all. You are that head of gold.'" NIV translation
Daniel tells the king that he and his kingdom are the head of gold. Up to this point in history, the Babylonian kingdom was the greatest most far reaching kingdom that the world had ever seen. Gold is associated with the divinity of God and so Daniel reminds the king that this has been given to him by God.