CNNMoney.com

NEW YORK - Billionaire John Paulson, who earned his hedge fund billions when he bet against the housing bubble, is waging a new noteworthy bet.

Paulson is investing as much as $250 million in a new gold fund next year.

His hedge fund, Paulson & Co., will launch the fund Jan. 1, 2010 and will buy shares of gold mines and make other investments related to the precious yellow metal, a source familiar with the firm's plans told CNNMoney.com. Paulson discussed the fund at a meeting with investors on Tuesday.

It will aim to outshine record-breaking gold prices, which have been hitting all-time highs recently as the dollar has weakened, fueling inflation fears.

Although the minimum investment for the gold fund in unknown, hedge funds usually require a minimum $1 million investment to get into the fund. Most of Paulson & Co. funds are focused on institutional investors.

Paulson, who is worth an estimated $6 billion and raked in $2 billion in 2008, invested in gold earlier this year when he purchased shares of AngloGold Ashanti Ltd. (AU) and Kinross Gold (KGC); about 10% of his $30 billion fund in gold-related investments.

Paulson also owns billions in gold exchange-traded funds and forward contracts, which have profited from the mounting gold prices. Gold hit a fresh record high near $1,150 Wednesday.