Gradient perfectly around border in Photoshop?

In ski safari I noticed that the ground has a perfect gradient around even irregular mountains.
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However whenever I try a gradient on my image it doesn't fit around perfectly instead it comes out more like this. Notice how the gradient doesn't go up the mountain and it's super white at the top where as in ski safari it does somehow.
image
It's hard to tile my images(trying to make dynamic environment) when my gradient is linear. What is a good way in Photoshop to make my gradient have a consistent path for the gradient like it has in ski safari.

Thanks

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