Always near the front of the field, he was headed two furlongs out, but jockey Watson kept his cool and produced the horse to put his head on the line to win in a fast 1m 9.56s in the big race of the final day of Glorious.
It was a first win in the famous handicap for Newmarket trainer Hugo Palmer, who has trained this horse since he was bought as a yearling.
"He has won all his handicap outings now!" said Palmer. "He was our first two-year-old winner of the year as a juvenile when he won at the Craven meeting in April, he finished his two year-old season rated 112 and he has been rated that at two, three and four and now at five and now he has just won a Stewards' Cup off top-weight.
"A huge word has to go to the jockey - I wanted a high draw but not perhaps as a high as we got and I told him that and to gravitate across to the middle of the track to where we thought the nicest ground was. Jason [Watson] wasn't remotely flustered when he was headed, he was strong, he was cool, he was calm - easy for a young lad to get going too quick.
"It was lovely - it has been a plan for a long time and I spoke to his agent Tony Hide three weeks ago that I'd like Jason to ride Gifted Master in the Stewards' Cup. The horse needed a career-best even with a claim - I spoke to Pat Smullen at length as we thought about bringing someone over from Ireland. But Andrew Balding didn't need Jason and I have been impressed with his riding this season - I am even more now!
"I have been getting nervous as Jason's winners have gone from 38 to 45 to 48 and I think that is his 50th winner. I was getting nervous about his five pound claim disappearing; I think I would still have used him if it had gone down to three pounds, but as we only won a couple of inches it might have made the difference!
"I wasn't sure that we'd won until I saw the slow-mo. I watched the race with Jono Mills, who bought the horse, and said that we'd still run really well off top-weight as I thought we were second.
"Gifted Master is unbeaten in handicaps - I was saying it tongue in cheek before the race because he has only run in one but he has now won a Stewards' Cup off top-weight. He was a Group horse in a handicap and has real class - he's been a real star for us.
"He's been a massive part of my stable, it doesn't happen to many Flat trainers. When you get the good ones they perhaps don't last or they are not that sound - he's been there that long."
Watson, whose family are from Brighton, has been a man in demand this season and he proved why with an impressive ride.
Watson is apprenticed to Andrew Balding and has ridden 48 winners from 309 rides in 2018, a 15% strike-rate. He rode out his 5lb claim with this big-race success, his 50th in all.
Watched in the crowd by his mum Jenny and dad Tim, Watson said: "I'm just in shock. Gifted Master is such a brave and talented horse. I was very lucky to get the ride for a great trainer and a lovely owner. I got the ride on Gifted Master a couple of weeks ago. I was originally down to ride Foxtrot Lady, but my agent Tony Hind said it was worth riding Gifted Master in this race as he thought he had a good chance.
"This time last year, I was sat at home watching this on the television. I never thought I would win this race, let alone win it, so it is a great feeling.
"I haven't had many rides at Goodwood and it is a very tough track to ride, but looking at his form, he stays a mile and I thought I would sit on him and make my challenge late and it paid off.
"Gifted Master is as game as anything. I was a little worried that we had got beat but I knew he stayed and he is as tough as old boots.
"I'm 18. My parents Tim and Jenny are here and I'm from Brighton. I joined Andrew Balding's yard two years ago. Gary Moore and Suzy Smith deserve big credit as they rang Andrew up and put a good word in for me. I went up there, cantered up the gallop and he offered me the opportunity to be an apprentice for him one day.
"I've been very fortunate to get good rides. So many people have helped me out in the past year and I can't believe how well it has gone - hopefully it will continue.
"People were asking me at work this morning about how I would celebrate and I had all these ideas in my head, but it was such a tight finish and I wasn't sure if I had won."