In the area of underwater autonomous localization based on geomagnetic anomaly inversion, it is a challenge to obtain the magnitude of magnetic dipole field from data measured by magnetometers, due to the existence of geomagnetic background field, where geomagnetic anomaly comes from magnetic dipole target. We propose, in this letter, a localization method combined with magnetic gradient tensor and draft depth, where the distance in vertical direction between underwater vehicle and the target can be calculated by measurements at two draft depths. On the other hand, to avoid movement of the underwater vehicle, the magnetic moment of the target is used to form an equation group about position of the vehicle, which is solved to realize continuous underwater localization. The detailed principle and steps of this continuous localization algorithm are described in detail, and its good performances, such as high-precision and fast convergence, are proved by theoretical analysis and numerical simulation.