The Germany international has been in red-hot form, with 11 goals in his last 12 Premier League games.
He felt a slight groin strain in the 3-0 win over Tottenham last weekend and missed the 3-1 win over Everton as a result.
But the City boss had encouraging news on Gundogan’s progress.
“He is much, much better, better,” said Pep.
“It is not a big issue, but to avoid risk today, we have given him a few more days to recover,
“But for Arsenal and Borussia Monchengladbach he should be ready.
Of course Gundo is exceptional. We spoke about that. If you want to win titles and finals we need the whole squad.”