I had a squeak like that on my e28 528e; it was the cheap sway bar links that the PO had put on a year earlier. The boots on the ball joints had deteriorated and allowed the ball joints to go bad. Same thing could be happening here. To see if that's the problem, it's best to raise the front end and put a hand on each of the joints while a helper turns the steering wheel. You'll feel the vibration making the squeak.
See #7 in the diagram below.
Pretty easy to replace, just make sure you get a quality component. (Autohaus AZ has Lemfoerders for about $26 each)