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PRECIOUS-Gold prices steady as stock markets recover

* Emerging markets, stocks steady after hefty losses

* Federal Reserve set to begin two-day policy meeting

* Chinese demand expected to ease due to Lunar New Year

(Updates prices)

LONDON, Jan 28 (Reuters) - Gold prices steadied on Tuesday, after falling 1 percent in the previous session, as European stock markets rebounded from their lowest in a month and emerging markets stabilised after three days of intense selling.

Moves were muted ahead of the start later in the day of a two-day meeting by the U.S. Federal Reserve, which is expected to continue tightening monetary policy.

Policymakers will almost certainly make a second $10 billion cut to the Fed's $75 billion monthly bond-buying programme, analysts said. Expectations that the programmed would be cut were a major factor in gold's 28 percent price crash last year.

Spot gold was down 0.1 percent at $1,254.74 an ounce at 1241 GMT, while U.S. gold futures for February delivery were down $7.40 an ounce at $1,256.20.

"We are looking more and more at the relationship between the movements of the major international stock markets and gold. That seems to be what's shaping the movement of prices," Peter Fertig, a consultant at Quantitative Commodity Research, said.

"Last year institutional investors sold gold significantly, because they expected higher returns on equities," he said. "The precious metals will only profit as an investment vehicle if there is now a reallocation out of stock markets into commodities."

Investors have been shaken this week by a huge sell-off in so-called risk assets due to jitters about the withdrawal of U.S. monetary stimulus, slowing Chinese growth and country-specific political tensions.

Emerging markets steadied after sharp falls as investors waited to see whether Turkey, one of the epicentres of the rout, would raise interest rates to defend its battered lira. European shares rose 0.5 percent.

Major currencies marked time ahead of the end of the Fed's policy meeting on Wednesday, with the dollar edging up 0.2 percent against a basket of major currencies.

LUNAR NEW YEAR

Demand for physical gold in China is expected to wind down this week as the Lunar New Year holiday approaches. China is expected to have taken over from India last year as the world's biggest bullion consumer.

"With the start of the Chinese New Year holiday beginning on Friday, the market will lose a key supporting sector in Chinese physical demand," MKS said in a note overnight.

Premiums for 99.99 percent purity gold on the Shanghai Gold Exchange slipped to $7 on Tuesday from $10 in the previous session.

Among other precious metals, spot platinum was up 0.6 percent at $1,414.99 an ounce, recovering from the previous session's three-week low.

Government-brokered talks between South Africa's AMCU union and the world's top three platinum producers ended on Monday with no breakthrough in efforts to end a strike, which has hit half of global output of the precious metal.

"The strike in the South African platinum mining industry is now into its sixth day, though the platinum price is failing to profit," Commerzbank said in a note. "On the contrary, it has actually shed nearly 3 percent since the strike began."

"By their own account, platinum producers had already built up considerable stocks ahead of the strike, allowing production outages to be absorbed. What is more, ETF investors have been exercising greater restraint of late. Since the beginning of the year, outflows have totalled nearly 20,000 ounces."

Silver was up 0.2 percent at $19.72 an ounce, while spot palladium was down 0.5 percent at $716.50 an ounce.

(Additional reporting by A. Ananthalakshmi in Singapore; editing by Keiron Henderson and Jane Baird)