Wander through Nim Pot there is a good selection there and gert an idea of prices and thne hit the local market and bargin. Also you can hit remote villages but this takes alot of time. I love texties and have a huge collection that I plan to photogragh and put on my website. I find alot of interesting items in Pana.

Mayaphile...when you say yarn, I assume you mean wool for knitting, right? If so, I haven't seen any in Antigua but that doesn't mean it isn't here. Most of the huipiles are woven from pure cotton, dyed with chemical dyes these days. These threads are usually manufactured outside Guatemala. The cost of these imported threads is part of what has driven the cost of huipiles up and many indigena have trouble affording them now. Traditional backstrap Guatemalan weaving is an endangered art form for this reason....and because cheap used American clothes are universally available.
THere is a vendor's stand deep inside the market in Antigua that sells the cotton threads used for weaving. I think your wife would do just as well buying that at home pricewise and since it is not a uniquely Guatemalan product, why cart it around? I imagine what your wife is looking for is unique wool yarn from GUatemala...that would likely be available only in the region where they have the sheep and wool, Momos for example, but I can't tell you more than that as I haven't gone hunting for it personally.
A great place for such yarn is Ireland. WHen we drove the Bantry and DIngle peninsulas there and then the interior toward Cork, we found several wool yarn mills with shops and I bought a suitcase full of gorgeous Irish knitting yarns for my daughter. Massachusetts used to have (don't know about now) wonderful yarn mills where they sold to the public (Uxbridge was one)...but you want GUatemalan yarn....wish I could ferret out something for your wife..just don't know.
One thing you could tell your wife about that might pique her interest, is that Casa Gigantes in Antigua sometimes has sweaters that are made from huipiles (the yoke of the sweater is from a huipile) and rest of the sweater is knitted.....it might interest her in collecting a few huipiles and trying to duplicate them back home (I have a sweater of this type I bought there a couple of years ago I'd be happy to show her when you are here). I know you are searching for things that will interest her.....
Latina Alma, my wife mostly uses cotton and the search for good yarn or similar items is an interesting part of the effort for her. She definitely accepts your offer to show her the huipil sweater.
We certainly will see Nim Pot and will check out Pana stalls. I think this trip is going to be pretty good for both of us.

There is a naturally colored cotton fiber shop that carries things made from this product across the street from Hotel Santo Domingo. Someone here is growing cotton that is actually colored:various shades of gold/brown. YOur wife could ask there if they sell any naturally colored yarns...that might be something special to find.....

That is great Bob....I had just seen some golds, browns, and a greenish color...it's been awhile since I have been down in that area of Antigua....Mayaphile's wife will have fun hunting!
I am taking notes here and mentioning info as I get it. The word is that naturally colored cotton as described normally "costs the Earth." We shall see. My guess is that costing such in Guatemala is not as bad as one might think.
Momostenango is one of the most interesting places in guatemala. Not only do is it the place where they process wool and make and shrink the blankets but they have a large shaman presence. Every high point has an altar with people burning incense and praying.
Down in the river canyon there are interesting hot springs which the people bathe in and shrink the blankets. the wool and blanket market is very interesting. We were there in January on the off day and there were less blankets than I remember comparing past visits.
The market is very early starting just after dawn and is over by 2 or 3PM. They sell wool yarn in different size balls, sold mostly by weight I think. Good deals go early. Momostenango is one of my favorite places however the road is now paved the entire way (now on the beaten track).
The San Francisco El Alto market caters to sewers. Get your brand name labels here, by the roll. Treadle sewing machines also, New.
Great sweater dealer in the main market market building in Xela (Quetzaltenango) called Xekijel, down on the second level. It is going to become a regular stop. (not Typica but great practical everyday sweaters - they have their own factory)
For Huipiles and fabrics it pays to go to the Ixchel Museum in Guate to learn a little about Guatemalan weaving. San Antonio Auguas Calientes is renowned for huipiles.
I have heard that the market is Najhuala is good for fabric goods. Chichicastnango is very good but you have to be really choosy and shop very early in the day.
Out of the way area markets would be Quiche, Nebaj, San Mateo Ixtatan, Todos Santos, Totonicapan, Huehuetenango. It does pay to ask what is in the back or under the table when you see something you like.

The fabric woven here on footlooms is used for the tipica market goods: all the little things tourists tend to buy to take home. A good place to buy that footloomed (as opposed to backstrap woven) fabric by the yard, is in Pana. There are several shops there that sell the stuff mostly to individal indigena artisans, but they will sell to tourists too. THat is the stuff I use to make simple gifts: pillow covers,quilts, table linens, moneybelts, all sorts of gifts for friends in the USA. I often combine it with huipile fabric that is hand woven. Footloomed Guatemalan fabric is narrower than USA fabric (which is most often 45" or so). The Guatemalan fabric of this type is about 30-32" which sewers should keep in mind and buy more yardage.
THe footloom was introduced by the Spanish and has been an industry employing mostly men as weavers while the backstrap loom is used mostly by women; it is pre-Columbian and indigenous. The long skirts you see Guatemalan women wearing are made on the footloom.