Arsenal have tabled a bid of a £42.5m for Gabriel, though it falls short of City’s valuation.
The Brazil international is also rethinking his plans to move to the Londoners.
Goal said City is prepared to sell him, but only for £51m. But Arsenal has so far been unwilling to pay that.
Gabriel is also rethinking a switch to the Gunners after they failed to qualify for the Champions League. The player’s agents were in London last week.
Instead, Real Madrid is now interested after failing to land Kylian Mbappe, who penned a new three-year contract with PSG last month.