If you haven’t noticed already the prices of gems have already crashed. They are more valuable in their low-quality form than their high quality form, and anyone who is combining gems is losing money big time.

Here is roughly how they break down this morning:

1. Chipped – 500 gold
2. Flawed -1150
3. Normal -3,000
4. Flawless -4,900
5. Perfect -8,000
6. Radiant -20,000
7. Square – 60,000
8. Flawless Square – Unavailable

If you have worked with your Jeweler you should know that not only does it cost gold to train him (5,000 the first tier, for example) but it also costs gold and takes time for each combine. If you combine 3 chipped gems into 1 flawed gem, based on the above values, your flawed gem should have an embodied value of 2,000 gold (3×500 + 500 combin cost) and the value of 2 seconds. But the resulting flawed gem will only sell for 1150 gold :\. You can use my gem calculator to calculate the values of gems as you combine them.

Another example is the flawed gems that are going for 4,900 gold, if you combine 3 of these and sped the gold to combine them the resulting Perfect gem will have cost you 17,380 gold.

There are two reasons this might be taking place, 1) people are stupid and are paying too much for chipped and other low level gems or 2) people are stupid and selling higher level gems for too little. Will one or the other adjust? They may not since low level gems drop in the game and people just don’t know what the hell they are doing yet.

The other interesting thing is that currently Square gems are the highest tier gem you can find and they cost 60,000 gold. Pages of Jewelcrafting cost 1,200 gold and Tomes of Jewelcrafting cost 40,000 gold. Tomes of Secrets are not available yet. If you wanted to make a Radiant Star gem right now you would need to come up with 2,187 of these Square gems and that would cost you 220 billion gold. This includes crafting costs and the cost of pages and tomes.

Prices will continue to drop for all the lower tier gems and eventually it wont’ be worth it to buy or combine low tier gems at all. They will just be too expensive. Players will stick to tiers 8 through 14.

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Important: Many of the strategies and tips I share here were originally inspired by the people at the Diablo 3 Gold Secrets Forum. If you're serious about making the big bucks in Diablo 3, or just being the best players, you need to signup ASAP.