Stock market investors on Monday gave a thumbs up to gem and jewellery stocks, thanks to the continuous fall in the yellow metal prices overseas. The precious metal sank to over five-year lows in global markets. Gold futures crashed as much as 4.6 per cent in the Asian markets, as China on Friday revised its official gold reserves upwards, marginally.

On the domestic market, gold prices fell below ₹25,000 per 10 grams on Monday, tumbling ₹524 in futures trade in early trades.

Shares of Shree Ganesh Jewellery House, Gitanjali Gems, Tribhovandas Bhimji Zaveri, PC Jeweller, C Mahendra Exports, Rajesh Exports, and Vaibhav Global gained between 1 and 14 per cent. However, Titan Company fell 1.23 per cent to ₹344.9 on the BSE.

Gold ETFs feel the heat

Gold ETFs — exchange-traded funds on gold that follow the price of gold — fell between 0.5 per cent and 4.5 per cent. Kotak Gold ETF was the biggest loser crashing 4.7 per cent. On the other hand, Canara Robeco Gold ETF fell just 0.5 per cent on the NSE.

According to analysts, the fall in gold prices bodes well for jewellery stocks, as the inventory costs for these companies would fall, giving them better leverage in the coming festival season. Besides, the results season began on a good note for the sector. Thangamayil Jewellery reported a net profit of ₹3.63 crore for the quarter ended June on revenues of ₹300.16 crore. This compares with a loss of ₹3.69 crore for the March quarter and a loss of ₹3.98 crore for the June quarter of last fiscal.

Knee-jerk reaction

Amid these developments, some analysts have sounded a word of caution, too. According to Ramesh Chordia, independent analyst, Monday’s rise in jewellery shares is just a knee-jerk reaction, as the metal price fell below the psychological ₹25,000-mark.

It is better to wait for individual companies’ results before venturing into these shares, as some of the firms are sitting on huge debts, he added. “Also, the price of gold will fall further and it will be prudent for investors to buy these stocks once prices stabilise,” he said.

According to an analyst with a Mumbai-based commodity broking house who requested anonymity, the yellow metal price may not recover any time soon, as economic recovery in the US is now on strong footing.

The Unnao gold hunt has led to illegal digging at forts and temples rumoured to have hidden treasures in Uttar Pradesh.

Shobhan Sarkar, the seer who had "dreamt" about 1,000 tonne gold buried under Unnao's Daundia Khera fort, had said the precious metal was hidden in Fatehpur's Adampur area as well.

As the news spread, some people dug up the platform of an ancient Shiva temple near the Ganga's main ghat in Fatehpur.

Reports said about two dozen places in ruins have been dug up. It was also rumoured that the diggers had fled with some gold.

Residents claimed Mahant Mohandas, who lives near the temple, was held at gunpoint during digging forcing authorities to cordon off the temple.

Fatehpur district magistrate Abhay Kumar said security personnel have been deployed to prevent a repeat of such activity.

Sarkar's disciple, Om Ji, had claimed "no less than 2,500 tonne of gold is hidden in the ruins in Adampur village". He said Adampur is located on the Ganga banks and was associated with 1857 revolt like Daundiya Khera. Om Ji asked the district administration to commission digging since the treasure in Adampur was easier to retrieve.

In Bahraich, some unidentified people left behind a huge pit after they probably got tired of the physical labour at the Charda Fort "No seer has ever dreamt about Charda. The only possible connection between Daundiya Kheda and Charda forts is that they have a mound and are associated with the 1857 revolt," said a local professor.

Jagjot Singh had ruled the place and reportedly sheltered Nana Sahab and Begum Hazrat Mahal besides helping them escape to Nepal in 1858. The fort was ruined when the British attacked it.

In 2004, Dinesh Pratap Singh from the local royal family got the ruins, spread across 11.5 acre, excavated after permission and found gold coins and jewellery besides some rare weapons.

Bahraich DM Kinjal Singh said police had been deployed at the fort and ordered arrest of those involved in the illegal excavation.

Another ancient Shiva temple in Banda's Piparhari area too has been targeted in the quest for gold. Residents said the place has no connection with Sarkar's dream, but it has been prosperous.

"The temple is located in Maharajpur Kher near Pailani forest range. It is believed that gold and silver kalash (pots) are buried here," a resident said.