In Section Four of the short story, Faulkner writes,

"When we next saw Miss Emily, she had grown fat and her hair was turning gray. During the next few years it grew grayer and grayer until it attained an even pepper-and-salt iron-gray, when it ceased turning. Up to the day of her death at seventy-four it was still that vigorous iron-gray, like the hair of an active man" (7).

The color gray symbolically represents old age and was also the color of the Confederate uniforms during the Civil War. Given the fact that Miss Emily symbolically represents the Old South and is associated with the Confederacy, the color gray corresponds to her antiquated lifestyle, culture, and age. The color gray is also a motif that associates various older Jeffersonians with the Antebellum era.

Faulkner also references Miss Emily's gray hair as a way of suggesting her necrophilia at the climax of the story. Following Emily's funeral, the citizens break down the door to her upstairs room and discover Homer Barron's skeleton lying on her bed. They also notice an indention on the pillow next to Homer's skeleton and discover a piece of "iron-gray" hair resting on it. The audience immediately realizes that the iron-gray hair belongs to Miss Emily, which means that she had been sleeping with Homer's skeleton for some time. Faulkner uses Emily's iron-gray hair as a subtle way to suggest that Emily may be a necrophiliac.

Gray hair, of course, is correlative with age.  Emily's hair plays a symbolic role throughout.  First, in Section II, the anonymous narrator notes:  "She was sick for a long time.  When we saw her again, her hair was cut short, making her look
like a girl, with a vague resemblance to those angels in colored church windows-sort of tragic and serene."  Angels are typically depicted as blonde and youthful-looking.  The new cut and color coincide with Emily's burgeoning romance with Homer. 

However, the next time her hair is mentioned, the narrator observes, "When we next saw Miss Emily, she had grown fat and her hair was turning gray."  The relationship has apparently gone sour with Homer, and her looks reflect her state of mind. Shortly thereafter, the narrator recalls, "Up to the day of her death at seventy-four it was still that vigorous iron-gray, like the hair of an active man."

Think about the symbolic parallels:  gray is the color of metal; metal equates with hardness and strength.  It is also interesting that the similie "like a man" is used, for Emily is not granted much femininity throughout the story.

The final description of her hair is repeated in the last line   On her pillow, "we saw a long strand of iron-gray hair."  Emily has died from a lack of love, from old age, from neglect.  Her hair tells the story throughout.