During the quest, Legend of Red Eagle, during the battle with Red Eagle my Skyforge steel sword disappeared as well as my gauntlets I had on. I noticed this since all of a sudden I was just punching Red Eagle. It did say something in the top left corner of screen but it went away too fast for me to read it (another annoyance with game, wishing the "info" on top of screen's font was a little bigger and stayed on screen longer). I looted Red Eagle and no missing items as well as I searched the ground everywhere.

I'm not sure if this was a bug. Could someone please clarify this? If your items do deteriorate is there a way to check how bad they are before the disappear?

I believe your weapon got shouted out of your hand. A few powerful enemies in the game have the disarm shout. Don't know about the gauntlets though.