Retail Turns Hopeful While the Recovery Narrows to the Smallest Stones

The contradiction defined the week. U.S. retailers talked up the holidays, with Signet, Macy’s and Deloitte all pointing to firmer demand, even as the polished recovery narrowed further into the smallest stones and rough held near multi-year lows. The pull is real; it is also becoming more selective.

Producers Hold the Line as Rough Stays Cheap

De Beers’ realized rough price held at $110/ct through the week, still down 37% year over year in Q2. The discipline behind that number sharpened: De Beers’ first-half revenue fell 19% and Alrosa’s 36%, with both defending price by holding volume back rather than selling into weakness. Yet the floor looks like it is holding, not cracking. Gem Diamonds returned to a first-half profit as rough firmed. India’s August polished exports, at $925M and down 4.93% year over year, showed the midstream still buying lean and selectively, but marked a step up from July’s 18% year-on-year decline.

The Recovery Keeps Narrowing to Small Goods

The week’s clearest signal was the widening RAPI split. Early in the week, the index had 1 ct goods up 0.63% and 0.50 ct goods up 2.52% on the month; by midweek, the gap had stretched to 0.45% versus 3.97%. Demand is rotating further down the size curve into affordable, commercial goods, the stones that compete most directly with lab-grown. The 1 ct index turning positive for the first time in over a year is a genuine milestone, but larger-stone strength remains unproven: price finer goods against real bids, not the index.

Retail’s Hopeful Read Meets a Selective Consumer

The demand signals came thick this week. Signet’s Joan Hilson pointed to firming natural-diamond demand into the holidays; Macy’s raised its full-year outlook citing fine-jewelry strength; Deloitte forecast continued U.S. holiday-spending growth. Set against Bain’s warning of softer jewelry demand, with younger buyers the relative bright spot, the message is that the mid-market is holding while trophy purchases are not the story.

Record gold, ranging near $4,335–$4,452/oz across the week and easing about 3% on the month but still historically high, reinforced the shift: manufacturers keep trimming metal weight and leaning on stone content, per Metals Focus. On the supply side, Surat’s lab-grown association pressed for pricing discipline as margins tighten, and Sarine opened a GCAL grading lab in Mumbai, giving dealers back days of working capital once lost to shipping parcels abroad. A softer rupee (USD/INR 95.96, +0.89% on the week) quietly cushioned Indian exporters’ dollar margins.

The Week Ahead

• Jewellery & Gem WORLD Hong Kong runs through Sep 20 at HKCEC, Asia’s bellwether fair and the clearest read on Far East Q4 demand; watch order flow in smaller commercial goods.
• IJS Istanbul opens Sep 30, the next regional demand gauge.
• The natural-versus-lab-grown spread at the small-stone end, where Surat’s pricing-discipline push now meets the polished recovery in the same sizes.
• U.S. holiday sell-through from Signet and Macy’s: year-end results will set Q1 2027 restocking; watch per-transaction and value-seeking composition, not just headline growth.
• The next RAPI monthly print, for whether the 1 ct recovery broadens beyond the smallest goods.