Hassaam Din of Chenani belt of Udhampur and Showkat Ali of Nagrota area of Jammu district were arrested for fraud, a police officer said.
The third accused in the case, Parveen Singh of Samba, had offered gold on cheaper rates last month to victim Rashpal Singh of Punjab, he said.
The accused initially had shown original gold petal as sample piece to the Rashpal. They later called him at Kapai-Nud in Samba district and finalised the deal, he said.
He reported the matter to Police Station Samba, he said.
Police immediately swung into action and arrested the accused persons alongwith an amount of Rs 1 lakh, he said, adding that co-accused Parveen Singh is still absconding with an amount of Rs 1.4 lakh.
Cases has been registered at Police Station Samba, police spokesman said, adding that investigation has been initiated and manhunt launched to nab the accused.