An Etymological Dictionary of the German Language/Annotated/Kleinod
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Kleinod, neuter, ‘jewel,’ from Middle High German kleinôt, neuter, with the variants kleinœte, kleinœde, neuter, literally ‘fine, pretty thing,’ then ‘costliness, ornament,’ not recorded in Old High German; ôt is a suffix (see Heimat, Armut, and Einöde). Hence the derivative has retained another feature of the earlier varied senses.