PRECIOUS-Gold steadies on lower yields, focus turns to Fed rate hike

* Stocks slip as slowdown risks sap confidence

* Fed expected to hike rates by 75 bps on Wednesday

* Palladium down more than 1% (Recasts, adds comments, details and updates prices)

By Brijesh Patel

July 25 (Reuters) - Gold prices steadied after early losses on Monday, buoyed by lower Treasury yields and a slight pullback in the dollar, while investors braced for a 75-basis-point interest rate hike by the U.S. Federal Reserve this week.

Spot gold was unchanged at $1,725.17 per ounce, as of 0232 GMT, after declining 0.2% in early deals. It had hit a more than one-week high on Friday.

U.S. gold futures eased 0.2% to $1,723.40 per ounce.

The dollar was down 0.1% against its rivals, making greenback-priced bullion less expensive for buyers holding other currencies, while the benchmark U.S. 10-year Treasury yields hovered near eight-week lows. [USD/]

"The fall in U.S. yields on the back of global recessionary concerns has underpinned gold," said Stephen Innes, managing partner at SPI Asset Management.

"Today, we could be seeing a touch of indecision ahead of the Federal Open Market Committee which is likely to underscore the Fed dilemma of fighting inflation at the expense of growth."

The main focus this week will be on the U.S. central bank's two-day policy meeting which concludes on Wednesday, and markets are pricing in a 75-bp rate hike.

Last week, the European Central Bank joined its global peers in the fight against soaring inflation as it raised interest rates by 50 bps and is expected to raise rates until inflation falls back to its 2% target.

Although gold is seen as a hedge against inflation, rising interest rates increase the opportunity cost of holding bullion.

Gold prices have dropped more than $350, or 16%, since scaling above the $2,000-per-ounce level in early March due to the Fed's rapid rate hikes and the dollar's recent rally.

Asian stocks lost ground on Monday, retreating from over three-week highs as worries about a global economic downturn sapped risk appetite. [MKTS/GLOB]

Spot silver was steady at $18.58 per ounce, platinum eased 0.2% to $871.43, and palladium slipped 1.5% to $2,001.62.

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu) ((Brijesh.Patel1@thomsonreuters.com; Within U.S. +1 651 848 5832, Outside U.S. +91 8067493865; Reuters Messaging: Brijesh.Patel1.thomsonreuters.com@reuters.net)) Keywords: GLOBAL PRECIOUS/ (UPDATE 1)

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