I asked the Bulgarian antiques salesman about the object, and his explanation about it was so striking and yet so obvious that I am still wondering how none of us thought of it. According to him, this is an old German sharpener steel, quite well made, from the turn of the 19th century. He said that he has seen a few instances, in which other sellers tried to pass it off as a knife (not a Celtic one though, just Medieval). This explanation fits perfectly with the shape of the blade and the hilt. As for the gold: it is possible for a deluxe sharpener steel to have been gold gilded. Not all objects, found in the ground with a metal detector are necessarily thousands of years old. Chances are, this sharpener steel got lost and when your friend picked up its signal with his metal detector and dug it out, it looked really interesting and he simply had no way of knowing what it really was. Check eBay item number 6508316709 for a somewhat similar object.
I am sorry this object is not indeed an ancient dagger or short sword, but at least the good news is that it is not a forgery. It has its own value, which may not be as much as a small retirement pension, but still.
Regards,
Teodor
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