Rate of gold varies from city to city due to which current gold prices are different from one city to another in India. Here are some of the main reasons for this difference:
Taxes: The variation in state taxes is one of the reasons why gold rates today are higher in some cities as compared to others. Some states impose higher taxes than others, and these taxes differ for each of the states within the country.
Demand: Demand for gold also fluctuates due to different population sizes and varying demographics in the country. Discounts are commonly offered on purchase of larger quantity. So, gold rates per gram today in cities like Mumbai are lower, given larger volumes of transactions.
Conveyance: India imports a bulk of its gold supplies through the sea. And when this gold is transferred to inner cities, inland transport charges are applied, which is why gold prices at port cities such as Chennai are lower than those in inner cities like Delhi.
Local Associations: Apart from the bullion association, cities or states have their own local gold associations where members have a say in setting the gold prices. This also accounts for the differences in gold prices between different cities.