From the idea that the mineral fools people (especially those who are fools) into mistakenly thinking that they have found gold. Regarding minerals that were named for deceptive appearance that prompts confusion with others, compare also apatite.
A mineral or other substance often mistaken for gold; mainly iron pyrite.
(figurative) Something worthless that deceptively seems valuable.
2011, Ellen A. Ensher, Susan E. Murphy, Power Mentoring, page 50:
Although many dot-com dreams turned to fool's gold in a short time, in reality, there are a number of entrepreneurial ventures that not only survived but thrived during and after the dot-com crash.