The 19-year-old is out of contract in the summer and negotiations over a new deal have not reached a successful conclusion.
Several clubs in Europe have been keeping tabs on the young forward and are interested in snapping him up for a small fee during the summer transfer window.
Arsenal have been trying to convince him to sign a new deal with suggestions that he could leave in the coming months, but Arteta is positive that Balogun will stay at the north London club.
He claimed that the young forward has made it clear that he wants to continue at Arsenal and the Gunners boss is confident that sporting director Edu will agree a deal soon.
Arteta said in a press conference: “I am pretty positive about it.
“Every time I spoke to him, he mentions the same thing that he’s determined to stay here.
“We had some really positive conversations with his agent as well and Edu is in charge of that.”
Balogun has made five senior appearances for Arsenal this season and has scored twice.