PRECIOUS-Gold prices pare losses as dollar wilts

* Dollar eases 0.3 pct versus the euro, stocks firm

* Palladium set for biggest one-day rise in 3 months

* GRAPHIC-2018 asset returns: http://tmsnrt.rs/2jvdmXl

(Updates prices, adds comment) LONDON, April 9 (Reuters) - Gold clawed back early losses on Monday as the dollar turned lower, lifting assets priced in the U.S. currency, but caution over the prospect of a potential escalation in the China-U.S. trade stand-off kept prices hemmed in a range. Gold rose half a percent on Friday as simmering worries over trade friction and softer than expected U.S. payrolls data for March knocked equities and the U.S. unit lower, but struggled to maintain those gains early on Monday.

Spot gold was at $1,332.28 an ounce at 1355 GMT,

little changed from late on Friday but off an earlier low of

$1,326.61. U.S. gold futures for June delivery were 60

cents lower at $1,335.50. Global equities rose on Monday as the U.S. government played down fears of a trade war with China, though traders remained cautious. China escalated its attacks on the Trump administration on Monday over billions of dollars worth of threatened tariffs, blaming Washington for trade frictions and reiterating that it was impossible to negotiate under "current circumstances." President Xi Jinping is due to deliver a speech on Tuesday at the Boao Forum for Asia in Hainan province. "The speech by Xi Jinping tomorrow is going to be really important. If it shows that the trade war tensions are not de-escalated, we could see a big upside move for the gold price," Think Markets' chief market analyst Naeem Aslam said. "If we look at the price action for gold, we are consolidating," he added. "Support is at $1,307 and resistance is at $1,348. We need to break out of this zone, and that would set the tone for the new trend." Hedge funds and money managers cut their net long position in COMEX gold in the week to April 3 and boosted their net short position in silver to another record, U.S. Commodity Futures Trading Commission data showed on Friday.

Silver was up 0.3 percent at $16.39 an ounce, while platinum was 1.2 percent higher at $917.90. Palladium , which as a component in autocatalysts is

the most industrial of the major precious metals, was up 2.8 percent at $926 an ounce. The metal had fallen for the past 11 sessions, hitting its lowest since mid-August at $895.47 on Friday. It is now down more than a fifth from the record high reached in January. "The near 20 percent correction in palladium prices signals a possible bear market," ScotiaMocatta said in a monthly note. The correction is not surprising given the sharp price gains of recent years, it said, but added: "Palladium's strong fundamentals remain in place, so we would expect dip-buying before too long."

(Reporting by Jan Harvey Additional reporting by Swati Verma in Bengaluru Editing by David Goodman and David Evans)