So far in Cataclysm, the best gems we can cut for gear are blue quality. They give 40 core stats, depending on the cut, and are obtained from prospecting Cataclysm level ores. Blizzard will, of course, eventually release epic gems. The question is when and how.
We've actually had a convenient preview of epic gems. Take a look at this Brilliant Blazejewel that was added to the PTR -- like the Stormjewels in Wrath of the Lich King, it's unique equip. We don't know where it comes from, but my money's on Blizzard's repeating what it did in Wrath and rewarding these from fishing. You'll note that epic gems in Cataclysm appear to have 50 stats, 10 more than the blue-quality gems. Last expansion, we went from 16 stats on a blue to 20 on an epic. It's not just the economy that's inflated this expansion, I suppose.
While these Blazejewels are unique, eventually there will come a time when we can obtain epic gems that we can use in as many sockets as we can afford. The question is how will these be made available? At the end of Wrath, there were a myriad of ways to obtain epic gems:
- Prospecting Titanium Ore
- Creating them with a daily alchemy transmute
- Buying them with honor
- Buying them with Emblems of Heroism
The Wrath fishing Stormjewels were added in patch 3.1, and here, we see these Blazejewels datamined from the patch 4.1 client. Does this represent the beginning of a whole expansion of copy-and-pasted trade skill design from Wrath? If so, we can expect epic gems to appear in patch 4.2 and be obtainable from very similar sources, as they were in Wrath. Pyrite Ore is the Cataclysm equivalent of Titanium Ore, and right now it prospects into green gems, blue gems, and Volatile Earth. If Blizzard simply adds a chance to get epic gems to the drop table, that will increase the value of Pyrite considerably.
People have been talking about this since the launch of Cataclysm, and it seems that most have elected to stockpile Pyrite just in case. I've stated before that "I am not nearly comfortable enough forecasting Blizzard's trade skill development decisions based on past behavior to risk any serious amount of money on bets one way or another" -- but honestly, all the datamining seems to be indicating that profession design really is being done by simply reusing and renaming systems created in Wrath.
There's been speculation that instead of epic gems coming from Pyrite (which, unlike Titanium, is already relatively valuable because of the Volatile Earths you prospect from it), they may come from a new type of ore. This is possible, of course, but it doesn't feel likely. It would prevent people from feeling as if they're playing the same content again, but we already have three ores. Adding another one would be a serious investment in design time.
I now believe that Blizzard is most likely to make epic gems prospectable from Pyrite. Unless it reduces the drop rate of something else that we can currently prospect from Pyrite, this means that all the people who are stockpiling Pyrite will suddenly see the value of their investments increase -- possibly drastically, depending on how hard it is to get epic gems from the other sources. We'll probably be able to buy them with either justice/honor points (or maybe conquest/valor points), and the price will be the determining factor in the new price for Pyrite Ore.
As for targets, I'm unlucky enough to be on a realm where Pyrite is rarely available for less than 150g per stack. Friends of mine tell me that on other servers, it's as low as 60g a stack some days. Regardless, assuming you don't buy so much ore that you flood the epic gem market out of profitability when you prospect it, you'll be safe buying at almost any price if epics do become prospectable.
All this stockpiling has certainly had an effect on the economy that will only get more significant as we approach patch 4.2, whether it brings epic gems or not. Every five ore in a bank somewhere represents one to three Volatile Earth locked away from the open market. You might be able to profit while everyone sits on their stock by prospecting Pyrite now and selling the volatiles when their prices spike. The recent change to the vendor value of green-quality gems won't hurt Pyrite as much as it does the other ores. That said, don't get caught with tons of Volatile Earth (or products made from it) in patch 4.2, as it'll probably get mass-posted on the AH as people start to prospect for epics.
The current balance between supply and demand for Volatile Earth is a little skewed on most realms because of all the stockpilers. Once this stockpile has burned out and the flood of volatiles produced as a byproduct have been absorbed, the eventual price should balance out to slightly less than it is now. Basically, once epics gems are prospectable from pyrite, people will prospect their ore immediately instead of holding it. This will mean a long-term supply increase, but the demand is constant and the long-term supply increase will not match the supply in the first few weeks after people start prospecting their stockpiles.
Betting against gamblers
If epics don't become prospectable from Pyrite at all, the volatiles will not bottom out as low because some of the stockpiles will certainly be smelted and used for Pyrium Bars. Regardless, at some point, all this Pyrite Ore being held in everyone's banks will need to get processed somehow, and that is likely to involve an unsustainable dump of earths onto the AH. This is a prediction that I am certainly willing to bet on, so as soon as I see the lowest buyout for earths hit 20% of what they are now, I'm planning on buying everything I can afford and letting them trickle back out when all the stocked pyrite dries up.
Even if you don't have the risk tolerance to stock pyrite (or someone else is doing a better job at buying than you are), you can profit when epic gems are released by betting against the stockpilers.
Maximize your profits with more advice from Gold Capped as well as the author's Call to Auction podcast. Do you have questions about selling, reselling and building your financial empire on the auction house? Basil is taking your questions at firstname.lastname@example.org.