* Volatility jumps, EM-linked selloff worsened by policy squabble
* Stocks steady as gold miners shine (Updates prices, adds analyst quotes)
JOHANNESBURG, June 5 (Reuters) - South Africa’s rand continued to weaken against the dollar on Wednesday, sliding to a fresh one-week low, weighed down by a squabble between the ruling African National Congress (ANC) and government over the mandate of the central bank.
At 1600 GMT the rand was 1.5% weaker at 14.8700 per dollar, bringing losses since Monday to more than 3% as a double whammy of dismal growth and policy uncertainty re-emerged.
On Tuesday Statistics South Africa announced the economy shrank by 3.2% in the first quarter as power cuts over the period battered mining and manufacturing, news that was followed by a decision by the ANC to explore quantitative easing, sending the currency into a tailspin.
On Wednesday Finance Minister Tito Mboweni told reporters in Johannesburg there were no plans to change the bank’s mandate. At the same event central bank governor Lesetja Kganyago insisted the main job of the bank was to protect the rand’s value in the interests of growth.
But the ANC refused to back down from a call it made on Tuesday to mandate the central bank to boost employment, underlining deep fissures in the party that are seen as leading obstacles to President Cyril Ramaphosa’s reform drive.
“The announcement, and counter announcements on the SARB’s independence, come at a poor time for the rand, which typically sees material risk from the second quarter to the end of the third quarter,” said Investec’s chief economist Annabel Bishop
One-month implied volatility hit its highest level since April 10, before easing slightly.
The yield on the benchmark 10-year government bond reached 8.5% having started the previous session at 8.415%.
On the bourse, stocks gained for a second session as the All-share index rose 1.01% to 57,073 points, while the blue chips Top-40 index rose 1.04% to 50,976 points.
Global gold prices rose to 15-week highs, lifting mining company Gold Fields to the top of the blue chips with a 6.35% advance to 76 rand, while fellow bullion miner AngloGold rose 4.22% to 217.20 rand.
“The fear of these trade wars; investors are fleeing to gold which is usually a safe haven, contributing to higher gold stocks,” said AG Capital trader Jaun Wessels.
Heavyweight luxury brand Richemont gained 3.47% to 117.07 rand on the back of the weaker rand, stronger U.S. markets, and a possible interest rate cut by the Federal Reserve, Wessels said. (Reporting by Onke Ngcuka and Mfuneko Toyana, Editing by William Maclean)