It is the second magic weapon made of standard metal. Typically ranged and melee weapons have bronze to dragon gear in increments of 10 levels. Magic, however, does not. There are no bronze to rune magic weapons (except white).
If players speak to the Drunken Dwarf in Keldagrim with it equipped, he will realise that the pink dragons he saw were actually dragon battlestaves.
Hreidmar uses one of these during the fight with him in Birthright of the Dwarves.