Dafan,
It's in the house next to the guy who sells fish. Give or take a few metres, it's in the upper righthand part of your map. Go inside the house and there will be a vase or somesuch on the table next to the door. It's in there.
Did you already know that you can upgrade it?
SPOILER
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Obtain a diamond and a beljuril gem. Go to the fat storekeep in Waukeen's Promenade, the one just below Quataris. Choose the correct dialogue options and he will upgrade it for you.
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Melusine, Archbabe of the OHF and the LH
Your voice is ambrosia