The tumbling price of gold could settle more than 75 percent lower than it was in 2012, according to updated research from the Duke University Fuqua School of Business.

Professor Campbell Harvey argues that historical patterns suggest gold could fall as low as $350 per ounce.

In 2012, when gold was trading at $1,700, Harvey successfully predicted the price would drop. He published research showing that if gold kept up with inflation, it should have been $825 per ounce. Since then, gold has plummeted in value, shedding more than $600 per ounce.

In his new research, Harvey revisits his forecast. He argues there is substantial risk the price could fall much lower than $825.

"Based upon what we have seen in the past, gold could drop as low as $350 per ounce," Harvey said.

The updated paper, "The Golden Constant," was produced with Claude Erb, a former asset manager.

Harvey's predictions are molded by the historical relationship between the price of gold and inflation measures, plus the movement over time of gold price adjusted for inflation — known as the real price of gold.

The average real gold price multiplied by the U.S. Consumer Price Index — a common measure of inflation — provides a measure known as the "golden constant." The Golden Constant hypothesis suggests that in the very long-term, the price of gold is driven by inflation and that deviations in the price relative to inflation will be corrected.

Harvey says there are at least two ways to look at the current historically high real price of gold. One is that the real price of gold may "mean revert" towards the golden constant. That would generate a price of about $825 an ounce.

But if the price were to overcorrect, it could fall much lower.

"In a golden constant context, $350 an ounce is the downside risk to the price of gold," given the historical behavior of gold prices, the paper states.

The golden constant, Harvey points out, is not a fact, but a lens through which the price of gold can be viewed. It is analogous to price-earnings ratios — the ratio of share price to per-share earnings. When the P/E ratios get very high, a correction is more likely.

"The high and low real prices of gold highlight that even if there is on average a golden constant, the real price of gold has strayed, and probably will stray, far from this possible central tendency," the paper states. "It is also possible that the future will be unlike the past."