Opal is an amorphous form of hydrated silica and is common throughout the world, but precious opal, showing all the brilliant spectral colours, is comparatively rare, hence it's value. It comprises an irregular array of well-packed silica spheres in a three-dimensional grating that can only be seen by the use of an electron microscope at powers of 30,000X and over. Opal carries many impurities, even silver in some Coober Pedy opal but they play no part in creating the beautiful array or colours. It is the only gemstone known to man that has the unique ability to diffract light, that is, to white light or ordinary sunlight into beautiful colours. This is done when light enters the opal and is split on the interface of small voids that have formed between the spheres.
The size of the voids is controlled by the diameter of the spheres. The angle at which the light is split is critical and determines the colours that are exhibited. Spheres with a diameter of 3500 angstroms produce red colours, while those ranging down to 1500 angstroms give violets and blues. Colours are also dependent on the angle from which the stone is viewed. They can change or disappear with the movement of the stone.

Slice of quality opal under Electron Microscope.

    
Image showing internal structure of spheres.
Minor differences in orientation can give rise to change of colour.