Traore, who joined the Gunners from Monaco in 2005, spent last season on loan at Portsmouth and made 14 Premier League starts.
The gifted teenager has since returned to Emirates Stadium but has been linked with a move to St Andrews, with Blues manager Alex McLeish eager to bolster his options at left-back.
Traore has explained he has not been informed of a concrete approach from Birmingham while stating that he hopes to remain at Arsenal and fight for his place in the side.
He told Skysports: "I haven't heard anything about that [the rumours]. I want to stay at Arsenal this season. I don't really want to go out on loan.
"But if Arsene Wenger does not want me here and thinks that I need go out on loan again, I will see. I would prefer to stay.
"Honestly, I have not heard anything (from Birmingham). At the moment, maybe Birmingham have talked to Arsenal. But nobody has come to me about it. I don't know anything about it."
He added: "I am feeling good. I am feeling more hungry and eager to learn.
"I will have to speak with Arsene Wenger, at the moment I am just concentrating and working hard to try and be the best at training so that at some point he sees that I can push for a place."