Amulet of Shadows Location (The Lady's Ring Quest) - Morrowind
Location: Northeast of Gnisis
Video: How to get the Amulet of Shadows
The Amulet of Shadows is retrieved by first helping Synette Jeline find her ring during The Lady's Ring side quest. You can find Synette southwest of Ald Velothi, a port town west of Khuul and north of Gnisis. Use my map screenshot below if you're having trouble locating her.
Synette asks you to help her obtain her ring that she lost in the nearby pool of water. Finding the ring is very difficult since it basically blends in with the environment around it. My advice to you would be to use Night Eye if you have it since that will help a little bit as well as do the half-in-half-out water glitch.
If you're unfamiliar with the water glitch I am talking about in basically every game if you position yourself just right where your camera is half submerged and half not you'll typically be able to see everything without the water obscuring your view. This will allow you to very easily spot the ring, as shown in my screenshot below.
After picking up the ring Synette and her now semi-visible friend will attack you. Kill both of them to complete the quest and make sure you loot her friend, Tavynu Tedran for her Amulet of Shadows.