* Euro, shares rise on hopes deal for Cyprus will emerge
* SPDR holdings see first inflows since early February
* Coming up: U.S. Fed policy decision; 1800 GMT (Updates prices)
By Clara Denina
LONDON, March 20 (Reuters) - Gold eased from the previous session's three-week high on Wednesday, with the price reflecting some investor optimism that the crisis in Cyprus might not spread further in the euro zone.
Cypriot leaders were still scrambling however, to avert a financial meltdown after parliament rejected the terms of a European Union bailout, but markets have remained calm expecting an alternative solution would emerge.
Spot gold hit a three-week high at $1,615.16 an ounce just after the Cypriot parliament vote on Tuesday, as investors sought refuge in the safe-haven metal. It struggled to retain those gains and was last seen at $1,608.70 by 1257 GMT, down 0.3 percent.
U.S. gold futures for April delivery fell 0.3 percent to $1,607.
"The risk of default in Cyprus did bring some buyers into the market, which was also short, so we had some short covering coming through in the past few days," BofA-Merrill Lynch analyst Michael Widmer said.
"But overall the underlining picture hasn't changed and for now that crisis looks quite contained ...so there is still no strong reason why you would want to massively increase your exposure to gold."
In other markets, the euro firmed against the dollar after sliding to a four-month low in the previous session. European shares also rose after three days of losses and U.S. stock index futures signalled a higher start, with investors looking ahead to a statement from the Federal Reserve's policy committee.
Upbeat U.S. economic data in recent months has encouraged investors to pile money into the stock market, helping the S&P 500 index climb more than 8 percent so far this year. Gold, in comparison, is down nearly 4 percent.
Investors will be closely watching the outcome of the Federal Reserve's two-day meeting, as well as a press conference by Fed Chairman Ben Bernanke.
Supportive of gold prices, holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, rose 2.708 tonnes to 1,222.162 tonnes on Tuesday, the first increase in daily holdings since early February.
PHYSICAL BUYING LAGS
The rise in spot gold prices for six out of the past seven sessions has dented demand in Asia's physical markets, where buying slowed from earlier in the month.
"We see gold's more expensive price tag contributing to the lighter physical demand this week," UBS analyst Joni Teves said in a note.
"But in China there may also be some element of payback, as typically strong activity in March was brought forward to the latter half of February amid more attractive prices."
Buyers are now waiting for prices to return to lower levels when the situation in Cyprus calms down.
In other precious metals, silver edged down 0.1 percent to $28.84 an ounce.
Spot platinum was up 0.9 percent to $1,564.99, partially recovering from a lowest since January 7 at $1,545.25 hit on Tuesday after poor European car sales data and worries about the health of the euro zone economy.
The metal's discount to gold has narrowed to around $50, having reached nearly $60 yesterday. It was at a premium of more than $80 one month ago.
Spot palladium rose 2 percent to $745.97, after tumbling 3.9 percent in the previous session, the sharpest one-day decline in nearly five months. (Additional reporting by Rujun Shen in Singapore. Editing by Veronica Brown and Alison Birrane)