Blues were willing to smash their tranfer record by offering £5.5million for Dunn but Rovers turned down the offer because of the method of payment - a £3million down-payment and £1.25million pound for each of the next two years dependant on Blues survival in the Premiership.
Gold responded to their turning down of the offer and claimed they were holding the club to ransom and this has triggered an angry response from Rovers chief executive John Williams.
"We are certainly not holding Birmingham City to ransom," he told the Rovers official website.
"It is a very simple situation - they made an offer, we turned it down.
"I am not against performance-related deals, football will always be about that, but we don't think the structure of this proposal is right.
"The offer is £3million plus a further £1.25million if Birmingham stay in the Premier League next season, followed by another £1.25million if they stay up the following year.
"It would appear clear that if Birmingham themselves don't have total confidence in their own survival it's not in Rovers' interests to broker a deal which depends upon it."