Do I need to start an activity to capture daily steps, daily elevation gain, daily elevation loss.

You get step counting automatically. As for elevation gain, AFAIK the only thing you get without starting an activity is 'floors climbed' (i.e. sets of stairs), which is a bit of an arbitrary measure of ascent. If you're just wanting to set and hit an elevation target every day then that's probably going to work, but if you're wanting a record of your actual elevation then I think you're going to need to be using an activity. I don't think there's any equivalent of the floor tracker for measuring descent though so you'd definately need an activity to record descent in any way.

You could try expedition acticlvity and set the save points at time intervals or you can save them manually. This I believe  will save a lot of battery and file size but I never used it in real life so I'm not sure about it..

NeilJonesOnline said:

the only thing you get without starting an activity is 'floors climbed' (i.e. sets of stairs), which is a bit of an arbitrary measure of ascent.

It is actually relatively easy to get the total daily elevation gain, especially if you use feet, since Garmin counts a floor for each 10 feet climbed. So you only need to multiply the number of floors by ten to get the elevation gain. If you use meters, you have to know how to multiply by three (3 meters per floor), which is certainly more challenging, but should be still manageable.

NeilJonesOnline said:

I don't think there's any equivalent of the floor tracker for measuring descent though so you'd definately need an activity to record descent in any way.

The total daily descent is available too. Again in 10feet (3m) floors:

So as a conclusion - yes, you can easily monitor both the steps, as well as the total daily ascent and descent too without using any activity. On the other hand, when using activities, you'll get much more data than just that, and it then also allows you to use Elevation Corrections  - an elevation profile based on the topographic data, since the barometric altimeter is not always accurate (especially when the atmospheric pressure changes, or due to the temperature changes, or because of wind or moisture)

Right, I think the main difference is that outside an activity, you may have to meet a certain threshold before it counts a change.  I'm not sure whether it is triggered by rise over distance or rise over time, but walking on gradual slopes outside an activity does not seem to increase the floor counts on my FR255. But steeper hills do count as steps for me.

Total elevation gain/loss values I see in an activity summary seem to match closely with the floors up/down values shown in that chart during the same time (after dividing by the 10 foot/floor ratio as above). So it seems that even gradual climbs are counted as floors climbed during an activity, and the watch is just less sensitive in the watchface mode and ignores slower elevation changes.

Personally, I did not observe any difference in the sensitivity of counting the floors in and out of an activity on my Instinct 2.