The court heard that the man had been drinking at a local pub before he got involved in an altercation with two young men on Vasaplan, the main square in Umeå.
Around a dozen people then witnessed him making racist comments about the pair and openly using the Nazi salute favoured by supporters of Adolf Hitler during World War Two.
Police were immediately called after he was spotted making the gesture and he was arrested at the scene.
The man, who has not been named by Swedish media, was formally convicted on Tuesday and told he faced a fine of 20,400 kronor ($2,403).
His case hits the headlines just months after the city of Umeå grabbed international attention after organising an anti-Nazi event, but failing to include any speakers from the Jewish community.
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Umeå, a former European Capital of Culture, is home to 80,000 residents and has previously celebrated a reputation for tolerance. Just 5.6 percent of the local population voted for the anti-immigration Sweden Democrat party in the last general election in September 2014, compared to 13 percent nationwide.