The yellow circle is an item used in The Eyes of Glouphrie and The Path of Glouphrie. It has a value of 3 in the Elven machine as calculated by multiplying the value of the shape's colour and the number of sides the shapes have. It can be found in Tree Gnome Village in a dungeon. You can get it if you find the key to set Golrie free. Search the chest and you'll find it.