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Gold prices were steady on Monday, having risen 1.8% in the previous session, as hopes that the U.S. Federal Reserve will adopt a less aggressive policy stance later in the year countered pressure from a firmer dollar.

FUNDAMENTALS

* Spot gold held its ground at $1,656.09 per ounce, as of 0113 GMT. Prices marked their biggest one-day percentage gain since Oct. 3 on Friday, following a report that some Fed officials are signalling greater unease with oversized rate hikes.

* U.S. gold futures were up 0.3% at $1,661.60.

* The dollar index rose 0.2%, making greenback-priced gold more expensive for overseas buyers. Meanwhile benchmark 10-year Treasury yields were off their near 15-year high touched on Friday. [USD/]

* The U.S. central bank should avoid putting the economy into an "unforced downturn" by raising interest rates too sharply, and it's time to start talking about slowing the pace of the hikes in borrowing costs, San Francisco Federal Reserve President Mary Daly said on Friday.

* The Fed is widely expected to raise its benchmark overnight interest rate by 75 basis points next month, as it battles high inflation.

* Although gold is considered a hedge against inflation, higher interest rates increase the opportunity cost of holding the asset, which yields nothing.

* Demand for physical gold picked up pace in India last week as some consumers bought into a retreat in domestic prices to a near one-month low ahead of the Dhanteras and Diwali festivals.

* Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, fell 0.3% to 928.10 tonnes on Friday.

* Spot silver fell 0.5% to $19.30 per ounce, platinum rose 0.4% to $935.38 and palladium inched 0.1% higher to $2,021.31.

DATA/EVENTS (GMT)

0715 France S&P Global Mfg, Serv, Comp Flash PMIs

0730 Germany S&P Global Mfg, Serv, Comp Flash PMIs

0800 EU S&P Global Mfg, Serv, Comp Flash PMIs

0830 UK Flash Comp, Mfg, Serv PMIs

1345 US S&P Global Mfg, Serv, Comp Flash PMIs