Fire Agate gemstone is a layered stone. The layers are small enough that light entering them forms interference colours known as “fire.” The gem is thought to be formed when hot water saturated with colloidal silica and iron oxide invades cavities in country rock and begin to cool. Chalcedony with iron oxide begins to grow on any available surface (the iron oxide gives the basic brown colour to the gem). As the solutions began to precipitate and grow layers of silica and iron oxide would be deposited depending on the relative level of those elements in solution and underlying conditions. These alternating silica and iron oxide layers (Schiller layers) cause the brilliant fire in the gem. As iron oxide ran out in the solution colourless chalcedony continued to growï¿½ï¿½ï¿½.. Many of these gems are found in Kingman Az, to Needles, Ca. Area around the Colorado River. Ask GG in Golden Valley, Az. Fire Agate has also been found in quantity in some areas of Mexico.