Mumbai: A rally in gold has seen the precious metal hit two-year highs and this could slow gold offtake even if the country receives good rainfall as rising prices will deter gold purchase particularly in rural India that accounts for 60% of India’s annual gold consumption of 900-950 tonnes.

Bullion traders say unless prices fall to Rs 28,000 per 10 gm there will be no demand in the market. Gold has touched Rs 31,000 per 10 gm on Thursday, the highest in two years.

The sentiment in the market for the yellow metal is bullish and analysts say that there may be a further spike in prices if Britain votes for Brexit as investors will get out of pound and euro exchanges and invest in gold. Farming community had gone through two successive years of drought which have put them in liquidity crisis.