After Yubaba is told by Haku that something she loves is missing, she first checks the gold she has. However, once she realizes her son Boh is gone, she is so angry/worried, and the gold turns to mud.
Some fans argue over who did really did this. Some say that No-Face's gold is actually mud, but it seems like Yubaba, with her magical powers, turns the gold to mud herself during her anger. After all, why would the gold just turn to mud all of a sudden without magic? Even though No-Face "made" the gold, he wasn't in her office to transform it to mud, and we don't know if the other workers who got gold, like Lin, had their gold turned to mud as well, just because No-Face's possible "gold spell" broke and it all became mud.
I would have to say that the gold, was never gold in the first place. No-Face used some spirit trickery to make it apear as gold and when No-Face left the illusion was broken. I pretty sure that greedy witch would never mess with gold like that.
Just like No-Face able to use Aogaeru's voice as his own, its not really surprising if he had the ability to transform mud into gold. Maybe the magic only lasts for a certain period, and its coincidentally during Yubaba's rage. Per comment above, Yubaba too greedy for messing with gold like that. Look at her fingers all adorned with jewelled rings...
I think that he placed that gold to trick the people in the bath house, that since the River spirit was giving out gold he thought it would be a good idea to help him to eat the people the sprits. Why? I am not sure, but the gold turned to mud because in the first place, it was fake, just an illusion. Maybe, this is just a hypothesis.
I agree with Pineapple16. Yes, both Yubaba and No-Face had magic, and so although we simply saw No-Face making gold right from his hands without seeing any mud, Yubaba's anger about Boh broke the spell. After all, Yubaba is a greedy witch and most likely would never do it on purpose in a clear mind, but in her worried rage about her son, she accidentally did it, not paying attention to the gold/mud anymore.
No-Face mirrors emotions and wants, so his magic will please everyone personally. Yubaba, as a greedy wich she is, wants possessions and power. Alas when her offspring is in danger the mother in her emmerges and what she truly wants outpowers her obvious gold hoarding mentality. Meaning that gold will turn into mud, worthless and secondary, when you are worried about something that really matters.
184.108.40.206 wrote: No-Face mirrors emotions and wants, so his magic will please everyone personally. Yubaba, as a greedy wich she is, wants possessions and power. Alas when her offspring is in danger the mother in her emmerges and what she truly wants outpowers her obvious gold hoarding mentality. Meaning that gold will turn into mud, worthless and secondary, when you are worried about something that really matters.
I believe the gold turning into mud is symbolic of the nature of money in modern society. Historically, people exchanged their services for gold which had true value. However, today money is just paper and can be created at will by our governments, although people will still fall over themselves to get their hands on it.
The "gold" which No Face is able to create at will to seduce the employees at the bath house symbolises this paper (mud) money, which is mistaken by the employees to be gold. However, Yubaba later admits that the gold that they received from No Face "doesn't even come close to covering the damage caused". When Haku confronts Yubaba and tells her that she hasn't noticed that "something precious to her has been replaced", her ignorance is lifted and she can see the pile of "gold" in front of her for what it really is: mud.