Penelo will leave the party before you entering Dalan's Place. You will

obtain a key item, the Crescent Stone after speaking with Dalan. Now move to

the Northern area which is the Storehouse 5. Remember the chest in front of

Dalan's Place is the chest that you're NOT supposed to open, or else you'll

lose an easy chance to obtain one of the strongest weapons later. Once you

reach the Storehouse, Kytes will give some items to you. Now enter the left

gate which leads to your next objective.