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1. Download the free pattern. (This requires Adobe Acrobat software.)
2. Trace pattern onto black fabric. Transfer the design onto paper and cut it out. Trace the design onto the front of the black fabric with a white marking pencil.
3. Layer the fabrics atop each other in the following order: red, yellow-gold, green, and black. Hand-baste the fabric layers together.
4. With sharp embroidery scissors, carefully cut through the black fabric layer about 1/8-inch from the penciled line. Clip the curves of the design to the line every 1/4 inch, and fold under the raw edges, pressing carefully with your fingernail. Using a blind stitch, hand-sew the folded edge to the next layer of cloth.
5. Cut through the next layer (green) 3/8 inch from the appliqued edge of the black fabric. Clip into the curves 1/8 inch for every 1/4 inch. Finger-press under 1/8 inch and sew the fold to the next layer (yellow-gold). Repeat as above for the next layer of fabric to complete the design. Press the finished applique and remove the basting stitches.
6. Except for the red layer, cut away 1/2 inch from all sides of the fabric layers. Next cut the dark green and yellow-gold layers successively smaller than the black layer. Round all corners. Fold under the black fabric 1/8 inch, finger-press and blind-stitch the fold to the red fabric layer. Fold under the raw edge of the red fabric 1/4 inch and blindstitch it, centered, to the felt on 3 sides for the ornament backing. Stuff lightly with fiberfill and then sew the opening closed.
7. Make border. With a white marking pencil, trace around a quarter coin to create a scalloped border on the exposed felt. Trim away the excess felt with embroidery scissors. Paper-punch a hole through the felt in the center of each scallop. Sew scallops of 5 beads each between the punched holes.
8. Finish with ribbon for hanging. Fold the ribbon in half and stitch it to the back of the ornament.