By Catherine Boyle, Staff Writer, CNBC.com
NEW YORK (
CNBC) -- The price of gold, which has fallen in recent weeks as part of a broader market sell-off, has even further to fall, Marc Faber, author of the
Gloom Boom, and Doom Report, told
"We overshot on the upside when we went over $1,900," said the fund manager, who has 25% of his portfolio in gold.
"We're now close to bottoming at $1,500, and if that doesn't hold it could bottom to between $1,100-$1,200."
Faber, who said that the recent sell-off had come about following nervousness about industrial metals, added that a 40% correction wouldn't surprise him.
US gold suffered its biggest daily drop in more than five years on Friday.
In a volatile day of trading on Monday, gold dipped as low as $1,535 before ending the day up $28 to $1,623.
Recent falls in the gold price came after a sustained rally which saw some predict that prices would hit $2,000 or even higher.
While he is bearish in the long-term, Faber forecast a rebound in markets in the short term.
"Both equity markets and gold markets have become very oversold, and I think a rebound is occurring," he said.
"Following this rebound, which I expect to get underway this week, there will be a longer slowdown."
John Woods, Chief Investment Officer at Citi Private Bank, told
Monday that he believes gold will fall to around $1,400 before continuing its long-term rise.
"It was massively over-bought in the last couple of weeks and now it will get over-sold," he said.
"I don't think the long-term trend is broken."
The markets started off Monday in jittery mode after the failure of the weekend's International Monetary Fund (IMF) meeting to announce any new action on the euro zone debt crisis.
Faber predicted a short-term rebound when he spoke to
at the start of August . Since then, the S&P 500 has fallen by 50 points.
While the spotlight has been on Greece and the euro zone in recent weeks, Faber believes that the sell-off is actually being prompted by a slowdown in China.
"Asian markets are weak, Asian currencies are weak and economically sensitive stocks are weak because there's a more meaningful slowdown in China," he said.