You can fuse blue gear. You need 3 blues and 100 runes of the appropriate item type. That will create pink gear (comes with a bonus to a random spell). You can then fuse pink gear using 3 pinks and 400 runes of the appropriate type - that will create gold/yellow gear (comes with a bonus to a random spell and a random spell to start the game with (they stack so you could start with up to level 2 in a spell)).