Abstract: The transmitter antenna coils (3,4) provide an oscillatory electromagnetic field in a surveillance zone (1) wherein a security tag of easily saturable magnetic material originates a tag signal. The original tag signal detected by the receiver antenna coils (6,7) is modified to obtain predetermined characteristics of an AC-pulse. The modified tag signals are further processed in a signal processor (18) by methods of synchronous detection and synchronous accumulation which not only increase a signal to noise ratio but also provide rejection of external periodic noises. The controller (14) provides a time-domain blanking for the cyclic operation of the system. The interrogation field is periodically made weaker, which allows to separate true tag signals from those originated by other magnetizable objects. The noise level is also determined periodically during time intervals in which no tag signal can possibly exist. This noise level is used as a dynamic reference which effectively prevents false alarms.