Gray is a dominant modifier that changes the coat color to white over the years. It can affect any color or color combination.
Gray horses are usually born with a fully colored coat, like an adult horse: i.e. a bay foal would be born with black legs, rather than pale colored legs that come in black after the foal shed. Other signs that experienced breeders look for are: chestnut foals who are born with dark skin, instead of pink hued skin; and telltale white hairs - even one - in the eyelashes or around the eyes. Graying often begins on the face, creating "gray goggles" around the eyes of foals. But horses can begin to gray on almost any part of the body.
Some horses, in particular very dark or black horses, have been observed to begin graying as late as nine years old. Some foals are born having already begun the graying process. Gray horses will have dark eyes and skin (if another dilution, modifier or white pattern has not changed them).