The Small Girl's Cape is a quest item available for purchase from all merchants in Pre-Searing Ascalon for 200 gold. If you purchase this, the next time you talk to Gwen she will ask if it is for her. If you give this to her, she will almost always immediately give you a Tapestry Shred and tell you that you are her favorite person "after Mommy" (see Sarah).
Later in the game you could find a Tattered Girl's Cape, which was believed to be the remains of this item after the events of the Searing.
While this item is listed as having a value of 100 , it cannot actually be sold once you have bought it.