The diamond market spent most of the past year marking inventory down. August data from Rapaport suggests that period may finally be ending. The Rapaport Trade Diamond Index rose 0.5% for 1-carat diamonds in the month, a modest figure on its own but a meaningful one in context. The 1-carat reading had printed flat or negative going back to May 2025. A positive month breaks a run that lasted more than a year.

Smaller stones did the heavy lifting

The more interesting detail sits below the headline carat. RAPI for 0.30-carat diamonds jumped 2% in August as of September 2. The 0.50-carat category advanced 2.5%. Those are the stones that fill bridal and everyday goods at mass and mid-market price points, and they moved several times faster than the 1-carat benchmark.

At the top of the size range the picture was flatter. RAPI for 3-carat diamonds slipped 0.4% in the month. Larger goods have carried their own softness through this cycle, and August did not reverse it. The split matters for anyone building inventory into the holiday season: demand strength is concentrated in the smaller, more liquid sizes that turn fastest at retail, not in the statement stones that sit longer in the case.

The lab-grown spread holds wide

Pricing context from late September frames why the natural market has room to firm. Lab-grown 1-carat diamonds averaged 700 to 800 dollars. Natural 1-carat stones averaged 4,200 to 4,600 dollars over the same stretch. That spread, roughly six to one at the midpoints, has become a structural feature of the trade rather than a temporary dislocation.

A gap that wide reduces direct substitution at the margin. A natural 1-carat buyer and a 750-dollar lab-grown buyer are increasingly different customers making different purchases, which gives natural pricing more independence than it had when the spread was narrower. The August RAPI prints are consistent with that read. For the broader market context this week, including gold and the week's auction results, see the weekly wrap.

De Beers and the rough calendar

On the rough side, Sight 8 was scheduled for September 22 to 25. Sight results feed directly into how confident the midstream feels about restocking, and a firming polished index gives sightholders more cover to take goods. The timing lines up: a market showing its first durable polished gains in over a year heads into a sight with a better tone than it has had in several cycles.

Retail confirms the demand side

The index is only half the story. Demand at retail is the other half, and Signet Jewelers supplied the clearest read this cycle. The company reported second-quarter net profit of more than 52 million dollars, reversing a net loss of over 9 million dollars a year earlier. Adjusted earnings per share came in at 2.19 dollars, beating analyst estimates of 1.72 as of September 9.

The quarter had other supportive marks. Signet revenue reached 1.5 billion dollars in Q2 FY2027, same-store sales rose 2.2%, and adjusted EPS increased 36% year over year. When the largest specialty jeweler in the United States posts same-store growth and a swing back to profit, it corroborates the pricing data: the diamond consumer at the mid-market is buying again. The full retail and earnings picture, including LVMH's first half, is in the industry column.

What to watch next

One positive month does not make a recovery, and a 0.5% move in the 1-carat index is small by any measure. But the direction and the breadth are what count here. Smaller goods up 2 to 2.5%, the 1-carat line positive for the first time since May 2025, a wide and stable lab-grown spread, and a major retailer swinging to profit all point the same way. The 3-carat category remains the outlier at minus 0.4%. Whether the larger sizes follow the smaller ones higher, or keep lagging into the holiday quarter, is the number the trade will be watching into year end.