The benchmark S&P/ASX200 index on Monday fell 45.4 points, or 0.51 per cent, to 8,927.7, while the broader All Ordinaries dropped 46.2 points, or 0.5 per cent, to 9,196.8.
Gold topped its April 22 record high of $US3,509, climbing $US44 to change hands as high as $US3,552 in Monday morning trading.
By late afternoon the yellow metal was just under that, at $3,548.
IG analyst Tony Sycamore said the rally was prompted by a social media post from the US president, who claimed outlandishly that prices in the United States were "WAY DOWN, with virtually no inflation".
The president's remarks come in the context of his campaign to dramatically lower US interest rates, which the Federal Reserve has been slow-walking due to concerns about inflation. Lower rates have historically sent gold prices higher.
The move sent goldminers soaring, with Northern Star climbing 6.4 per cent, Evolution adding 5.1 per cent and Genesis Minerals advancing 11.5 per cent.
Much of the rest of the heavyweight mining sector was in the red.
Fortescue fell 4.0 per cent to $18.52, BHP dropped 1.1 per cent to $42.70 and Rio Tinto retreated 1.3 per cent to $113.99.
Overall, seven of the ASX's 11 sectors finished higher, with consumer staples, telecommunications, materials and utilities slightly higher.
Technology was the biggest mover, dropping 2.7 per cent as Wisetech Global retreated 3.5 per cent and Xero lost 4.1 per cent.
All of the big four banks were down, with CBA sliding 0.8 per cent to $168.95, NAB dropping 0.6 per cent to $42.54, Westpac diving 0.9 per cent to $38.25 and ANZ dipping 0.3 per cent to $33.57.
The Australian dollar was buying 65.41 US cents, from 65.35 US cents at 5pm on Friday.
ON THE ASX:
* The S&P/ASX200 dropped 45.4 points on Monday, or 0.51 per cent, to 8,927.7
* The broader All Ordinaries fell 46.2 points, or 0.5 per cent, to 9,196.8.
CURRENCY SNAPSHOT:
One Australian dollar buys:
* 65.41 US cents, from 65.35 US cents on Friday
* 96.12 Japanese yen, from 96.06 Japanese yen
* 55.77 euro cents, from 56.03 euro cents
* 48.33 British pence, from 48.42 British pence
* 110.95 NZ cents, from 110.99 NZ cents
