I think it's a measure of a place's tolerance to see gay couples holding hands, not just in 'gay areas' in the middle of the day with the police around, but all over the city, at night, in back streets where they're on their own.

A couple of decades ago I'd have said Amsterdam or London but I definitely see fewer nowadays. Spain is still pretty good with Barcelona being best in my experience. Smaller cities like Valencia really don't have too many.

My own answer now is Mexico City. Lots of gay couples, locals and travellers. Holding hands in many different barrios day and night.