Alvarez is currently at the Olympic Games in Paris with Argentina, in what is a busy summer for the striker after winning the Copa America earlier this month.
The 24-year-old suggested he would consider his Man City future after the Olympics, after expressing frustration at missing out on starting key games for the club.
Alvarez has not started any of five major finals during his two years at the club despite playing the fifth-most minutes of any player.
“Last season, I was one of the players with the most minutes at City. But... in the end, you don't like being left out of important matches; you want to contribute.”
“I'll take my time to think about what I want for myself. We will see after the Games. First, if I can, I will take a few days off. Then we will decide.”
Guardiola offered a blunt response to the strikers comments in his recent press conference.
“I don't think about replacing. I knew he said he will think about it.”
“Once he has finished thinking, his agent will call Txiki (Begiristain) and we will see what happens.”
“I know he wants to play important moments, yeah. 'But the other ones (do) too. 18, 19 players as well want to play the big games.”
“I read he wants to think about it. Okay, think about it and after that he will inform us what he wants to do.”
In response Alvarez said:
“I heard what Guardiola said. I don't have much to say about it. I never said anything bad.”
'I just said that I was going to think about it like I do every season to make an analysis of what happened last season, a projection of what may come.
'I always say that I am comfortable and happy at City, which is a great club. So, I didn't say anything bad.'
The forward signed a new deal with the club until 2028 last year so if he does leave it would be for a huge fee likely reaching £100M.