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Last Updated: 21/07/12 6:43pm
Danedream (centre) just gets the better of Nathaniel
Danedream (9-1) got the better of a tremendous tussle with Nathaniel to win the Betfair-sponsored King George VI And Queen Elizabeth Stakes at Ascot.
The German-trained Arc winner from last season once again showed she is all heart as she responded superbly to pressure up the home straight to nail last year's winner right on the line.
Nathaniel to his credit lost nothing in defeat as he dominated his field from two furlongs out only to be collared right where it mattered.
St Nicholas Abbey raced in rear in the early stages and was caught out as the pace lifted off the final bend before he stayed on late in the day to take third without ever really threatening the front rank.
Market leader Sea Moon was also held up and he failed to land a telling blow despite making up some ground over the closing quarter mile as Sky Bet made the winner 6-1 from 16s for more Arc glory in October.
Jockey Andrasch Starke said: "It was close - it was very tight - but I had a good feeling. "It was exciting to come to race like this, and everything was in good shape.
"She fought hard and it's definitely the biggest moment in my life."
Her trainer Peter Schiergen added: "The last race there was no pace, but today there was a good pace.
"It's a good feeling. It's very important for Germany and it's very good for German racing.
"We'll go to Baden-Baden (Grosser Preis Von Baden) next and after that we'll go to the Arc."
Gosden said of Nathaniel: "I'm delighted with him. I didn't know which horse had won crossing the line and I was on the line.
"The winner has come back to her best. Anyone who was lucky enough to see her win the Arc last year, breaking the track record and destroying the colts, would know she is marvellous.
"She didn't handle the ground at Saint-Cloud the other day and she's come here and run a blinder, so full marks to her.
"Our horse has run his race quite brilliantly - I'm beyond thrilled.
"I can't believe in two weeks he can run two races like that back to back. It's quite impressive.
"I think I'll suggest that Danedream now goes to the breeding shed!"
Starke added: "When she came home the day after (the Grand Prix De Saint-Cloud) she didn't feel good - I thought this wasn't the same horse.
"Today, she was back to her very best.
"She's a small filly, but she has a big heart.
Gosden later confirmed Nathaniel could renew rivalry with Danedream in the Arc at Longchamp in October.
He said: "I'd love to come back here for the Champion Stakes and there is also the Arc as an option."
Trainer Aidan O'Brien said of St Nicholas Abbey: "He ran a great race.
"He has to be held up like that and we were just worried about the dead ground as he can't quicken like he normally does.
"There'll be other races for him."
Rider Joseph O'Brien found himself in hot water with the stewards and incurred a seven-day suspension (August 4-10) and a £900 fine for his use of the whip.
The ban will keep O'Brien on the sidelines for the last day of Glorious Goodwood on August 4.
Connections of Sea Moon offered no excuses for the 2-1 favourite, who closed from the rear for fifth.
Teddy Grimthorpe, racing manager to the colt's owner Prince Khalid Abdullah, said: "There's nothing to report - he just didn't quite fire as we hoped he might.
"He didn't quite travel through the race as we hoped and he didn't pick up when he needed to.
"We'll have to have a think about what we do next."
Australian jockey Craig Williams, whose mount Dunaden had a bold sight before finishing sixth, said: "He never got cover and he seemed to be a little bit on the bridle for the whole race.
"It was probably the wrong way to ride him."
Kieren Fallon, who had a great spin on seventh-placed Brown Panther for much of the way, said: "The ground has dried out a little bit for my fellow - other than that he would have been a lot closer.
He's tough and has run a good race."
William Buick was also suspended two days (August 5-6) for having used his whip above the permitted level aboard Nathaniel.