PRECIOUS-Rallying platinum grabs premium over gold price

* Platinum back on firm footing after consolidation

* Anglo American Platinum workers down tools

* Gold flatlines, platinum trades at premium again

(Adds new quotes; Changes prices)

LONDON, Jan 16 (Reuters) - Platinum gained the upper hand over gold on Wednesday, with rallying prices putting the metal's value above that of bullion for a second day due to concerns over South African mine supply.

Gold was overshadowed by dollar strength even as concerns persisted on U.S. debt negotiations.

Platinum had consolidated hefty gains made during the past six sessions earlier in the day, having hit a three-month high of $1,699.50 an ounce on Tuesday.

Spot platinum rose 0.8 percent to $1,691.50 an ounce at 1628 GMT. The two metals hit parity for the first time since March on Tuesday. Spot gold stood at $1,679.45, flat on the day.

Dealers and analysts said prices were likely to stay firm, underpinned by labour strike action after Anglo American Platinum confirmed an operational overhaul would cost 14,000 jobs and an estimated 400,000 ounces of production.

"Platinum looks very well supported, as the supply side remains the big variable, certainly one that is likely to provide strength to prices," Deutsche Bank analyst Daniel Brebner said.

Workers at several mines in the platinum belt city of Rustenburg had downed tools on Wednesday. Local media reported miners would be meeting later to plot wider strike action.

The protest combined with strong government objections to job cuts, with South African mining minister Susan Shabangu reitering Pretoria had not been consulted by the miner regarding its plans.

Supply disruptions have been weighing against demand weakness in Europe for auto manufacturing - its main use.

The European car market is diesel-dominated, where engines use a higher loading of platinum to clean up exhaust emissions.

"The problem for platinum is that auto demand remains weak. The market will fall into deficit this year, the question is if this will exceed expectations," Brebner said.

EU auto sales fell 16 percent year-on-year to 838,428 vehicles in December, posting the biggest decline in over two years, according to the European Automobile Manufacturers' Association (ACEA).

SHORT-TERM PRESSURE FOR GOLD

Gold was held back by a stronger dollar making the metal expensive for those holding other currencies, after finding support from a looming battle in Washington over the government's borrowing limit.

"We saw a little bit of dollar strength today... but it's just consolidation of recent gains," Standard Charterd analyst Dan Smith said.

However, some analysts expected the market to come under further near-term pressure if it behaved in risk-asset mode, as opposed to a safe-haven.

"There may be additional pressure in the near term due to the U.S. fiscal ceiling issues...investors may be worried about liquidity and the likely scenario is that the risk perception starts to intensify during the negotiations. We may see some pressure on riskier assets including gold," Deutsche Bank's Brebner said.

The metal should find underlying support in coming months from dollar weakness, which should send prices to a record average high, consultancy Thomson Reuters GFMS said.

It said gold prices will average $1,775 an ounce in the first half of 2013, up from an average $1,685 in the second half of 2012, and well above the previous half-yearly record average of $1,693 set in the last six months of 2011.

Spot palladium rose almost 2 percent to $722.50 per ounce - its highest in almost a year. Spot silver rose 0.2 percent to $31.41.

(Editing by Veronica Brown and William Hardy)