There is also way to adjust air pressure on the spray gun. Usually on the very bottom of it. A twist knob or even on the air pressure regulator attached to the gun. Start there . Most people set compressor at one setting and adjust as needed at the spray gun.
The $400 price tag had me thinking it had to be an extremely small compressor.
If you are serious about spraying paint, you will need a compressor that puts out around 15 CFM (Cubic Feet per Minute) minimum of air. The PSI is simply the pressure measurement. All air tools have both CFM and PSI requirements and both need to be met by your compressor.
That's a dandy air-brush compressor that puts out about 1.4cfm and has about 15 oz of air storage. My Binks Wren air brush drops 8psi to 30 from 38psi with the trigger not activated and a little 6' braided (perhaps 3/16" id hose) on a similar tiny air compressor used for spraying model trains and model cars, etc. So, assuming you are indeed using an airbrush and not attempting the use of either a touch-up or full-size spray gun--your experience does not match mine. I would suspect an internal blockage in your hose or airbrush. You mention "gun" so if you are attempting to use a siphon type spray gun with such a tiny cfm output--that indeed sounds like why you drop to 1 BAR or less in pressure when the trigger is pulled because you have no output in cfm to speak of Irregardless of your regulator setting. The total amount of hole area of the air openings on the air cap/ nozzle of any touch-up or full- sized spray gun would be far greater than the area of the tiny air hose. You would starve the gun at any regulator setting @ 15-60 psi (1 to 4 atmospheres above ambient)