The Gem Dragon Egg is located in the Soulforge under the Troops Tab.
The cost to forge one is 500 Souls and 500 Dragonite, the new form of material introduced in this new update.
As of right now, you can get Dragonite from completing a perfect run in the Dungeons (which will also unlock the Practice Makes Perfect achievement) and from the Dungeon Offers Tab under Dungeon.