Visitors to Antigua almost always return home with a few souvenirs from the city, and there are many excellent, hand crafted local items to buy there.  The city has several marketplaces that sell traditional Guatemalan goods made by local people.  Perhaps the most famous, and sought after, of local products in Antigua are its textiles, which are woven by hand by Mayan women from surrounding villages.   Each village has its own distinct pattern, allowing the cloth's wearer to be identified by others.  Many times on the streets in Antigua and in its marketplaces you can stand and watch these women work as the weave their cloth the traditional way, with one end tied to a tree or post and the other around their waists. 

One popular market which sells native goods is Nim Po't, a sort of arts and crafts gallery located near the Santa Catalina Arch.  Here visitors can purchase all sorts of locally made textiles and clothing, arts objects like small wooden sculptures, and hand-painted masks.  Most of the merchants expect to be bargained with, so there is no need to accept the initial price for an item if it seems too high.  However, most of the items sold here are not terribly expensive and those who are not comfortable bargaining or who do not know enough Spanish will not do too badly paying a merchant's up front price. 

On Sundays, Parque Central also becomes a marketplace.

And here is a link to some beautiful photos of Antigua Guatamala's marketplaces