Okay, my wine-soaked brain might not be comprehending correctly, but I shall give it a go...@trista - If you want to get an item Gold Forged (the most "forged" one can get with an item), here is what needs to be done:
1) Even though some Dragon kind will "Dragon Forge" (red forge) items that have not been at the very least 3 star forged, it is best to forge them to the three tier level prior. This doesn't mean you need to pay for ever tier. If you have the material to three star forge an item, while skipping the one, two starred forge, go for it! It will save you money and crafting material.
2) Next, go fight some Dragon kind to get said items "Dragon Forged". NOTE: You must have said items equipped at the time of defeating the dragon kind, for them to "potentially get Dragon Forged.
3) Once said items are Dragon Forged, go to Barroch on BBI, and look to see what is required to silver/gold forge equipment.
4) Pay the rift crystals and crafting material to upgrade to silver/gold forged. That be it.
Anything in your inventory or on your pawn, will not dragon forge when defeating a Dragon of any kind. Only items on your Arisen, that are upgraded but not already dragon forged, will "forge".
Hope this helps (and makes sense HA! XD ). Must go to bed.....bit loopy right now. @happy - got myself a big Hammer from your thoughtful gift.