The 23-year-old former Luton Town player has improved game by game since he joined Reading six weeks ago.
Upson had set his sights on a return to the Gunners first team when his loan spell with Reading expires. However, the form of Pascal Cygan alongside Sol Campbell is likely to mean more Highbury reserve team football for the youngster.
With question marks surrounding his Arsenal future reports had suggested that Bobby Robson was set to make a swoop in order to shore up his struggling defence.
Some sources even suggested that Upson had spent some time on Tyneside last week training with the Magpies. However, Royals assistant boss Kevin Dillon was quick to dismiss the story.
"Matthew has not missed a day's training with us since he arrived. I don't know where this story started, but he is here for three months, although he has been playing well so maybe scouts are watching him," he said, to Teamtalk.com.
Meanwhile, Upson himself said that the speculation doesn't bother him, he is just concentrating on working hard to earn an Arsenal recall.
"I've not heard anything from Newcastle and these type of rumours are quite frequent. I've come to Reading to get my fitness and ideally get back in the Arsenal team, so at the moment I'm concentrating on playing for Reading then going back and seeing what happens."