* U.S. stock markets stabilize, dollar strengthens
* Gold down 0.6 pct after rising 1.3 pct on Monday
* Struggles to break from trading range
* Funds raise bets on higher prices
(Updates prices, headline; adds comment, second byline, adds NEW YORK to dateline) NEW YORK/LONDON, April 3 (Reuters) - Gold prices fell on Tuesday as U.S. stock markets stabilized, easing fears of a deeper selloff, and the dollar strengthened, making bullion more expensive for users of other currencies. Gold had surged on Monday as falling U.S. share prices and fears of a global trade war pushed investors towards safer assets. But while European stock markets continued to fall, led by technology shares, Wall Street rebounded.
Spot gold dropped 0.6 percent to $1,333.09 per ounce U.S. gold futures for June delivery settled down $9.60,
or 0.7 percent, at $1,337.30 per ounce. "Gold has given back some of its sharp gains from yesterday. As well as a slightly positive tone in the stock markets, the dollar has rebounded against both the euro and the yen," said Forex.com market analyst Fawad Razaqzada. "The potential for a dollar rally is there this week, with Fridays jobs report being the key event risk. Should the greenback regain its poise then gold could come under further pressure." Gold has struggled to break from a $1,300-$1,360 per ounce trading range since the start of the year. "It's going to take a significant trigger to push it beyond this range," said Danske Bank analyst Jens Pedersen. One potential trigger is a trade dispute between the world's two largest economies, with the Trump administration expected this week to unveil a list of advanced technology Chinese imports targeted for U.S. tariffs after Beijing raised tariffs on 128 U.S. products. Gold is often used as a safe place to park assets during times of financial or political uncertainty. Funds have raised their bets on higher prices.
Speculative investors have room to expand their long positions further, which would help drive prices higher, analysts at Citi said in a note. Higher market volatility and rising tension between Washington and Beijing will likely hold gold prices above $1,300 per ounce throughout 2018, they said. "We assign a 30 percent probability that gold prices can scale $1,400 an ounce this year." Momentum indicators suggested gold prices would rise, with technical Fibonacci support at $1,317.25 and resistance at $1,361.80, analysts at ScotiaMocatta said in a note.
Meanwhile, spot silver shed 1.1 percent to $16.42 an
ounce after rising 1.8 percent in the previous session.
Platinum dropped 0.3 percent to $926.60 an ounce,
earlier hitting $912, its lowest since Dec. 26.
Palladium lost 0.7 percent at $928.25 an ounce after
touching $927.25, its lowest since Oct. 10.
(Additional reporting by Swati Verma in Bengaluru; editing by Alexandra Hudson and Diane Craft)