/way Highmountain 38.37, 61.32 Cave Entrance
Once you enter the cave, you need to take the first right, follow the path and took the wooden stairs on 36.80, 59.43, then right again.
Gelmogg stays on bottom of the room, and on the middle of the fight Dargrul will appear stunning both Gelmogg and player (like he does every time you fight Gelmogg), but you don't need to fight with him. He will talk a little bit, and than he runs away.
Once you defeat Gelmogg, you will obtain Ancient Highmountain Necklace