UPDATE 1-South Africa's rand edges higher; Zuma's future in focus

(Updates prices, adds quotes and detail)

JOHANNESBURG, Jan 15 (Reuters) - South Africa's rand strengthened slightly on Monday, helped by a weaker dollar and by reports that the ruling African National Congress party was preparing to discuss whether President Jacob Zuma should step down as head of state.

At 1522 GMT, the currency was at 12.3150 versus the dollar, up 0.4 percent from its close on Friday.

Two senior ANC sources told Reuters that the ANC's national executive would discuss at a meeting this week whether Zuma should step down.

Cyril Ramaphosa, who won a closely fought election to succeed Zuma as ANC leader last month, said in an interview broadcast on Sunday that the issue of Zuma's future would be dealt with "as time goes on."

Any sign that Zuma could step down early has tended to lift South African assets.

Zuma's presidency, tainted by corruption accusations which he denies, has tarnished the image of Africa's oldest liberation movement and seen the economy slow to a near-standstill.

"The rand is caught between the hunt for yield and political uncertainty. Traders tend to get nervous before NEC meetings like the one on Thursday," said Andre Botha, a currency dealer at TreasuryOne.

Botha said Zuma's future was one of the major factors that could drive rand volatility this week.

A central bank interest rate decision on Thursday is also in investors' minds, though the Reserve Bank is expected to keep its key rate unchanged at 6.75 percent.

In the equities market, stocks strengthened, supported by gold and platinum shares as prices for those precious metals benefited from a weaker dollar.

The benchmark Top-40 index rose 0.25 percent to 53,431 points, while the All-Share index climbed 0.26 percent to 60,240 points.

Among the top gainers, AngloGold Ashanti closed 4.40 percent higher to 139.90 rand, while Northam Platinum rose 4.20 percent to 57.58 rand, and Impala Platinum gained 3.13 percent to 34.55 rand.

Among decliners, retailer Woolworths Holdings fell 5.50 percent to 59.85 after flagging a up to 17.5 percent decline in half-year profit.

"It's quite disappointing, it (headline earnings per share) didn't come up to the market's expectation. At a glance, the businesses which they bought in Australia are not doing as well as the market expected," Cratos Capital equities trader Greg Davies said of Woolworths' financial results.

In fixed income, the yield on South Africa's benchmark government bond due in 2026 was down 6 basis points to 8.51 percent.

(Reporting by Alexander Winning and Nqobile Dludla Editing by Jeremy Gaunt)