Whenever you stop at a forge be sure to talk to the person in charge of it and buy all the iron ingot and leather or leather strips off of them. Then make as many leather strips as it takes for each iron ingot. Take it to the forge and make an iron dagger than only take 1 of each ingredient to make one. If you sell it back to the merchant, sell it one by one so you create more transactions to level up the speech ability.