The 19-year-old winger is regarded as one of the brightest talents in English football right now, and Steve McClaren has consistently sent scouts to watch him in the Championship.
Since breaking onto the scene with the Blues last season, Gray has established himself as a key player in a strongly performing Birmingham side, contributing eight goals and four assists in 69 games.
His statistical attacking return could improve, but he also possesses a fantastic work rate and defensive aptitude that few teenagers do.
His impressive form with the Blues has seen Newcastle keep a close eye on him, and it is suggested that the Magpies could make a move for him in January, as they do not want to miss out on Gray in the same way they missed out on Dele Alli.
Alli, now with Spurs and the senior England team, was on Newcastle’s radar whilst with MK Dons, and it was always expected that the teenage midfield would move to St James’ Park.
They were ahead of their rivals for Alli’s signature, but struggled to complete a deal, and eventually missed out on the star of the future when Spurs swooped in and confirmed his signing. He is now a key Tottenham player, and is sure to be the centre of the Spurs team, as well as England's set-up, for the next 15 years.
Newcastle do not want to come into this situation again, and are ready to move for Gray at the earliest opportunity to secure his signature ahead of many other Premier League teams.