A cloud refers to a certain type diamond inclusion. Clouds are a grouping of a number of pinpoint inclusions too small to be distinguishable from one another, even under magnification. The result is that, under a microscope, this grouping often looks like a soft transparent cloud or haze inside the diamond. Of course, clouds cannot be seen with the naked eye. Usually, this sort of inclusion does not significantly impact a diamond's clarity grade. On grading reports clouds are usually indicated as a group of tiny red dots close together or in a circle or another shape.