So I think I played this game close to 30 years ago. You make spells and potions by putting stuff in your hands and using hand gestures patterns correct?

Yes. I played this as a kid they had it on a table in the entranceway of costco in the 90s

YES you create spells with different hand positions. I am certain it is the same game you are thinking about. I played it also and just got it last night and going to dig into it today!

i got it long ago, though it was in german. i later purchased an english version and then i got the gog version.

You need an empty flask and the Liquify spell. With just those you can make a Jara healing potion (small amount of points restored, not full healing)
If you have a precious gem in the other hand and cast the liquify spell you can make various other potions. Most are listed in an appendix in the manual.

The healing potion also becomes more potent, as your healing magic levels up.