The 21-year-old Swiss international has been a sensation for the Bundesliga outfit since joining from FC Zurich last summer.
He is currently second in the German scoring charts with 16 goals, only one behind Bayern Munich's Mario Mandzukic.
Reports in Germany had claimed that Arsenal had already moved to secure a deal and Lothar Matthaus, working as a pundit for Sky Deutschland, claimed that the player's wife was already looking for houses in London.
But Drmic has reacted to the speculation and he told Bild: "At the moment I am single and there is no one house hunting in London."
Although he did refuse to rule out a move and added: "What will happen in the future, I don't know. Any boy dreams about playing for Arsenal."
Drmic, who has three-years left on his current deal with Nurnberg, is reported to have a release clause of less than £5million.
And his club admit that they are aware clubs are watching him.
"It would be naive to believe that Josip has not been noticed by anyone and I can not guarantee that he will remain," admitted Nurnberg sporting director Martin Bader.