In The Elder Scrolls IV: Oblivion, precious gems (such as diamonds, emeralds, sapphires, rubies, topazes, and pearls) do not have any practical use in crafting or enchanting and serve primarily as valuable items to be sold for gold due to their rarity and quality (flawed, flawless, or standard)
. You should:
- Sell precious gems to gain gold, as they have no other function in the game
- Keep Soul Gems separate , as these are essential for enchanting weapons and armor and for recharging enchanted weapons. Soul Gems can be filled by capturing souls using the Soul Trap spell or enchanted weapons, and they are crucial for magic-related gameplay
- Do not confuse precious gems with Soul Gems : precious gems cannot be used for enchanting or spell amplification, unlike Soul Gems
In summary, with gems (precious gems) in Oblivion, your best course of action is to sell them for profit, while reserving Soul Gems for enchanting and recharging purposes
