A dream like this of a child, especially a new-born child, usually signifies the birth (or the awakening) of the soul or psychic being in the outward nature. The colour of the cloth would mean that it comes with health (internal and external or both) and the spiritual riches.

The child usually signifies the psychic being, new-born in the sense that it at last comes to the surface.
It is not a fact that the psychic being always appears as a baby, it is sometimes seen symbolically as a new-born baby; many see it as a child of varying ages, it is a very common and usual experience; it is not peculiar to emotional natures.

It has several significances such as the new birth of the consciousness into the true psychic nature, the still young growth of this new being, the trust, reliance, dependence of the child on the Mother. The child (when it does not mean the psychic being) is usually the symbol of something new-born in some part of the consciousness.

The psychic is the soul that develops in the evolution -- the spirit is the Self that is not affected by the evolution, it is above it only it is covered or concealed by the activity of mind, vital and the body.

Find out thy soul, recover thy hid self,
In silence seek God's meaning in thy depths,
Then mortal nature change to the divine.
Open God's door, enter into his trance.
Cast Thought from thee, that nimble ape of Light:
In his tremendous hush stilling thy brain
His vast Truth wake within and know and see.
Cast from thee sense that veils thy spirit's sight:
In the enormous emptiness of thy mind
Thou shalt see the Eternal's body in the world,
Know him in every voice heard by thy soul:
In the world's contacts meet his single touch;
All things shall fold thee into his embrace.
Conquer thy heart's throbs, let thy heart beat in God:
Thy nature shall be the engine of his works,
Thy voice shall house the mightiness of his Word:
Then shalt thou harbour my force and conquer Death.