How to create a Skinning Knife
The Skinning Knife is used in many different recipes, most noteably though is recipes that require downgrading a pelt. If you have a High Quality Pelt or Medium Quality one; place the pelt you have and a Skinning Knife into a Sewing Kit and hit combine. It will downgrade the Pelt for you one grade. So if you have a High Quality Pelt it becomes Medium Quality. Any Medium Quality becomes Low Quality.
Skinning Knife (Trivial 41)
The Dagger Blade Mold and Hilt Mold aren't sold by every Smithing Supplies vendor. You'll want to visit the one in Plane of Knowledge or East Freeport for these two ingredients. The other ingredients are easily obtained from almost all Smithing Supplies vendors.
1 Dagger Blade Mold
1 Small Brick of Ore
1 Water Flask