Knitting, as with weaving and knotting, can symbolize a form of creativity, the ability to form something new out of raw material.
Psychological / Emotional Perspective:
We are working on emotions, or at creating a relationship.
Everyday Material Aspects:
The primary symbolism connected with knitting is that of creating something new out of available material, often having a pattern from which to work. If the pattern is intricate much care needs to be taken. A project or idea that is being worked on is beginning to come together. To be unravelling knitting suggests that a project that is being worked on needs reconsideration.
Gender / Specific Meanings:
In a woman’s dream knitting can represent the basic feminine skills. As many women become more business-oriented, knitting as a recreation – embodying a different form of creativity – may surface in dreams representing domesticity.
Also consult the entries for Colour, Knot, Weaving and Wool.