After moving 28 percent higher from June to early September, gold is now down about 17 percent to below $1,600 per ounce.
And one person of note thinks there's more downside in store -- much more downside.
In a CNBC interview Monday, "Gloom, Boom, and Doom Report" author and contrarian investor Marc Faber thinks gold could bottom at $1,500 per ounce, but sees the metal dropping to as low as $1,000 to $1,200 per ounce should $1,500 not hold. Faber said he wouldn't be surprised to see a 40 percent drop in gold.
While Faber said short-term market action might push gold higher, he's still bearish on the long-term potential for gold and equities. He said a longer slow down will follow the current recovery.
Though much media attention has been focused on Greek debt, Faber says markets slumping can be traced to a slowdown in China. "You have a capital goods level where capital spending increases dramatically and companies keep spending to a high level, but because of the acceleration, it can lead to recession simply by the economy growing at a steady rate, and I think we are at this point in China," Faber said.
Gold is off nearly $33 to $1,605.10 per ounce on the COMEX. The gold-tracking ETF, SPDR Gold Shares (NYSE: GLD), is 2.5 percent lower on the session.