The Witchers' Medallion is a silver symbol of the witchers' profession. It's sensitive to magic, vibrating and tugging on its chain when spells are being cast or magical beings, like genies, are present.
In The Witcher, Geralt's witcher medallion can be tuned to detect either monsters or magic. This particular screen can be found while Geralt is meditating, by clicking on the Inventory icon.
If the medallion is tuned to detect monsters, then it will begin to vibrate whenever a monster is near. When the monster is very close, there will be a red haze around the left side of the screen as well and the medallion will vibrate quite violently.
If the medallion is tuned to detect magic, then it will vibrate in the same manner when in proximity to Places of Power.