WARNING:THIS WAS MADE IN THE 1.8 PRE-RELEASE
You need to put this in your spawnchunks!
THIS BUILD IS POSITION / DIRECTION DEPENDENT! IF THINGS DON'T WORK,TRY MOVING THEM! (MOSTLY COMMANDS)
I have to say,I am proud of myself for making this....I know,there's probably been a ton of these before,but I have never seen a single one that's level-sensitive,order-sensitive and most importantly, effect-sensitive.
How this works is,first it sets the score in the Beaconic objective of a diamond sword and a gold block to -1 and 1,then it checks what block the gold block is on using a testforblock command.It finishes by summoning a custom gold sword,then killing the two items.All of this is powered by a simple hopper clock.

Unfortunately:Because of timing problems,the recipe is not "shapeless" meaning you NEED to throw a diamond sword BEFORE a gold block.

Commands:/scoreboard players set @e[type=Item] Beaconic -1 {Item:{id:minecraft:diamond_sword}} -gives diamond swords a Beaconic score of -1

scoreboard players set @e[type=Item] Beaconic 1 {Item:{id:minecraft:gold_block}} -gives gold blocks a Beaconic score of 1

execute @e[score_Beaconic_min=1] ~ ~ ~ testforblock ~ ~-1 ~ minecraft:beacon 0 {Levels:2,Primary:11} -tests for beacon

scoreboard players set @e[score_Beaconic_min=1] Beaconic 2 -sets gold blocks with a score of one to a score of two

execute @e[score_Beaconic=-1] ~ ~ ~ execute @e[r=1,score_Beaconic_min=2] ~ ~ ~ summon Item ~ ~1 ~ {Item:{id:minecraft:golden_sword,Count:1,tag:{display:{Name:"Gold-Coated Sword",Lore:["Sword of Riches!"]},Unbreakable:1,AttributeModifiers:[0:{Operation:0,Amount:8.0,AttributeName:"generic.attackDamage",Name:"Coated",UUIDLeast:1,UUIDMost:1}]}}} -summons item

execute @e[score_Beaconic=-1] ~ ~ ~ kill @e[score_Beaconic_min=2] -kills gold block

kill @e[score_Beaconic=-1] -kills diamond sword
 
scoreboard players set @e[score_Beaconic_min=2] Beaconic 0 -sets other gold blocks in the world to a Beaconic score of 0