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Oil prices slump, gold rallies amid uncertainty over Brexit vote

Oil and gold prices moved sharply in Asian trade on Friday as market sentiment swayed according to the results reported from the United Kingdom's poll on its future in the European Union.

With all 382 voting seats counted, the poll came in 51.9 percent in favor of leaving the trade bloc, and 48.1 percent on remain.

Crude oil futures fell sharply, reversing their overnight gains, and after U.S. crude held steady in early after-hours trading.

Benchmark light, sweet crude oil on the New York Mercantile Exchange fell as much as 6.8 per cent to $46.70 a barrel during Asian trade, after settling 2 percent higher in the U.S. session, while Brent crude oil prices dropped as much as 6.6 percent to $47.54 a barrel, after settling 2 .1 percent higher at $50.91 a barrel.

At 6.00 a.m. GMT, Nymex crude was down 5.3 percent at $47.44 a barrel and Brent crude had lost 5.3 percent at $48.21 a barrel.

Safe-haven gold breached two-year highs, gaining as much as 8.2 percent to hit $1,358.2 an ounce, before paring gains to trade 5.21 percent higher at $1,320.61 an ounce. Gold's resurgence came after prices hit a two-week low of $1,251.16 an ounce in the U.S. session on Thursday.

Naeem Aslam, chief market analyst at Think Forex in London, said gold had been under immense selling pressure in recent days but was now having a great day, adding that the next resistance level was at $1,400.

"The precious metal is on fire and it is the real winner of Brexit situation," Aslam said. "Investors are really trying to protect their investment and we are seeing some big bets coming in the market, which is pushing the metal price higher."

An employee looks at a gold coated rose flower, on display at the Sharps Pixley Ltd gold showroom, in this arranged photograph in London, U.K.
Simon Dawson | Bloomberg | Getty Images
An employee looks at a gold coated rose flower, on display at the Sharps Pixley Ltd gold showroom, in this arranged photograph in London, U.K.

IG analyst Angus Nicholson said gold prices would likely extend their gains on the official leave decision, with the potential for "quite a rally" over multiple days.

Oil prices would also head for further losses, as the uncertainty of the EU's future prospects brought the possibility of a global recession into focus, he noted.

"There will be a lot of uncertainty coming out of this whatever the result is and uncertainty is not good, particularly since a large part of our business is related to fuel trading," managing director of privately-held shipping firm Fratelli Cosulich, Timothy Cosulich, told CNBC's "Street Signs".

Reuters and CNBC's Holly Ellyatt contributed to this article.

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