UPDATE 1-South Africa's rand takes a beating on U.S. rate hike talk

* Rand slide to 7-week low, bonds down

* Gold stocks hit as hawkish Yellen hurts bullion (Adds latest prices, anti-Zuma marches, analyst quotes)

JOHANNESBURG, Sept 27 (Reuters) - South Africa's rand tumbled to its weakest in seven weeks, bond prices hit a one-month trough and gold stocks caved as a hawkish speech by the chief of the U.S. Federal Reserve worsened jitters about the local economy's prospects.

The rand slumped 1.23 percent to 13.5375 per dollar, its weakest level since Aug. 8, as comments by Fed Chair Janet Yellen on late on Tuesday emphasized the need to continue with rate hikes.

The speech saw the dollar and U.S. Treasury yields rally hard and emerging market assets across the board hit by outflows.

"Everybody is weak, everybody is taking a beating against the dollar. Higher rates in the U.S. at this stage are really bad for emerging markets," said chief currency dealer at TreasuryOne Wichard Cilliers.

"Yellen was very hawkish that's why you're seeing the dollar pumping," Cilliers said.

Traders said South Africa's dismal economic outlook and ongoing political turmoil was set to worsen sentiment toward the rand and sharpen the downward trend.

Thousands of South Africans on Wednesday marched against corruption under President Jacob Zuma's rule in protests led by unions which have backed a rival to the president's faction as the next leader of the ruling African National Congress.

Political wrangling between the treasury and the state pension manager the Public Investment Corporation (PIC) over a possible bailout for national carrier South African Airways was also weighing on demand.

"Whether it's perception or reality doesn't matter, there will be huge political fallout if any move is made to use the pension money of government employees in the wrong way," said portfolio manager at Ashburton Wayne McCurrie.

Bonds also weakened, with yield on the benchmark paper due in 2026 rising by 6.5 basis points to 8.605 percent, its highest since Aug. 31.

On the bourse, gold stocks took a knock as safe-have bullion buying subsided, with Harmony Gold and Sibanye-Stillwater losing out the most. The pair fell 2.99 percent to 24.02 rand and 1.59 percent to 14.90 rand respectively.

Gold is highly-sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the greenback, in which it is priced.

The Top-40 index inched up 0.27 percent to 48,953 points, while the broader All-Share index was 0.15 percent higher at 55,152 points at 1043 GMT. (Reporting by Mfuneko Toyana and Nqobile Dludla Editing by Jeremy Gaunt)