The gain knob should always be turned as low as possible to make it less sensitive to background noise. (But never set to zero.) The purpose of this knob is to control the input volume of your vocals or instrument, so the gain knob doesn’t turn your volume up; it controls how loud something is before it goes through any processing. So if you’re experiencing distortion or feedback while recording an especially loud source, simply use the gain knob to adjust the microphone's sensitivity.