State level taxes, demand and supply of gold during festivals and marriage season, good or bad monsoon season, transportation charges, profit margins decided by the local gold jewellers association and the security cost involved are some of the major factors that affect gold rate in India at the local city market level. These are the reasons due to which gold rate in India is almost different in every city across the country.
Further, factors like dollar rate against the Indian rupee and import duty on gold (which is roughly around 10.35% in India) affects gold rate at the country level. Gold rate in the international market is the same for all countries and it is mainly the import duty that makes gold cheap or expensive in a particular country. For example, because Dubai (United Arab Emirates) literally has no import duty on gold we find buying gold in Dubai to be much cheaper against to that in India. For gold rate in Dubai click here.
While, at the international level factors like global gold production, economic health of the world's major economies (including India), possibility of war involving any major country or any similar global crisis does impacts the gold rate in the international market.