Reports of the phenomenon of falling glitter and gold dust come from both Protestant and Catholic sources.
In the Protestant version, the dust typically occurs during revival meetings such as those occurring at so-called Third Wave churches such as the infamous Bethel Church in Redding, California which is pastored by Bill Johnson.
(A Third Wave church is one that is based on the belief that there are three historical periods in which the Holy Spirit has been active – during the first Pentecostal revival of 1906, the charismatic movement of the 1960s and the a new commitment to signs and wonders and supernatural experiences of God that supposedly occurred in the 1980s.)
Bethel churchgoers routinely report phenomenon such as “angel feathers” (they were tested and found to belong to ordinary birds), gold dust, and diamonds. (Thus far, there’s no indication of anyone getting rich off of the stuff.)
Johnson claims the falling angel feathers are based on a Bible verse that says, “there is healing in his wings” (Malachi 4:2) and doesn’t try to explain it much further.
The church and others like it, that cater to the “religious thrill seeking crowd,” have come under fire for luring people in with promises of spiritual highs rather than for the teaching of Jesus Christ.
Similar phenomena in the form of falling glitter is also manifesting at Catholic prayer events. Called escarchas, which means “frost” in Spanish, it acquired its name after witnesses saw layers of the dust appear on the face of a Filipino mystic named Emma de Guzman during apparitions of Jesus and Mary. The stigmatist has been approved by numerous bishops, including the former papal nuncio to the Philippines, but is still being investigated by the Holy See.
Meanwhile, escarchas in the form of glitter has been appearing in other Catholic circles such as with members of a small personal ministry named Guadalupe House in Oahu, Hawaii. According to an office worker named Peter, who runs the ministry, “beautifully luminous flakes of various colors continue to intermittently materialize around me and around a few close friends with whom I share a devotion to our Blessed Mother and the Saints.”
Peter goes on to say that the appearance of the escarchas is unpredictable and tends to appear “primarily when there is an atmosphere of deep Christian faith and spirituality: during times of personal or group prayer (especially during the Holy Rosary; quiet reflection; and during and after Holy Mass (especially during the priest’s homily) . . .” However, he has never seen them materialize during the Consecration.
Escarchas has also appeared in his bedroom, and even in his car when he was driving to Mass or to prayer events. “At these places the Escarchas have manifested on a few of my statues and reliquaries (under the glass covering!), in my palms, on the faces and arms of a couple of friends, as well as on everyday items such as clothing, blankets, and even on my paperwork at my job.”
Peter consulted with a priest about the phenomenon and although he doesn’t tell us what the priest said, he is convinced that the glitter is a sign from heaven.
This may be true, but because Satan is more than capable of producing such a manifestation, and we are instructed in Scripture to "test the spirits" (1John 4:1), until the Church has spoken about it, I would not consider it to be a grace from God. If it is a grace, God will make that clear through the authority of the Church that He founded here on earth.