Saravanakumar, one of the workers, had claimed that four masked men had barged into the gold smithy and beat up another worker Nagaraj, before decamping with the gold and other ornaments, when he had stepped out to bring tea at around 3.30 AM on May 20.
After verifying the CCTV footage from a nearby building, police grew suspicious and questioned the duo, who confessed to the crime.
They said they had buried one kilogram of gold and valuables in a graveyard nearby, which was later recovered, police said.