Federal Reserve balance sheet trends

Think of it like share dilution. For example, without corresponding demand, Tesla can issue 20% more shares arbitrarily, and the price of a share will drop 20%, or Tesla can wait for excessive demand and issue 20% more shares and the price of a share will stay the same because the market clamored for them. Maybe the price of Tesla would have gone 20% higher if they didn't issue those additional shares? Or maybe interested buyers were waiting for a moment to purchase many at once without affecting the market.

Fiat currencies are in the same place. Forget about the cognitive dissonance where currencies are tied to your national identity and comparisons to private shares therefore cause trepidation. The functionality is similar, we just use different terms. Share dilution = inflation.

As long as the relative purchasing power of a dollar, compared only to other currencies, is managed, the Federal Reserve can purchase as much as it wants. When the Federal Reserve purchases things, each transaction creates new dollars. The recipient has dollars that didn't exist prior and are just as fungible, slightly diluting the value of all other dollars (causing inflation). The Federal Reserve is fully capable of selling assets on its balance sheet, for existing dollars. Just options and choices that other market participants don't typically have.

The wide latitude in the side of the Fed's balance sheet comes from the weakness of other currencies. Central Banks around the world are doing the same thing, weakening those currencies, simultaneously actual people are selling their currency for US dollars. This increases the strength of the US dollar, and means the Federal Reserve can dilute it to weaken it. The long-standing predilection of the Fed, the President and Congress has been to not have a strong dollar, so you can predict what the Fed will consider doing based on macroeconomic events.

As long as all currencies are being massively created, the Federal Reserve can do the same proportionally. The amounts don't matter in that regard. You just want to pay attention to the constraints on what it can buy, and if those constraints are being followed, and if there is enough things for it to buy to accomplish its goals (otherwise massive de-flation is likely, and harmful in our ability to predict our purchasing power or investment decisions)

The wide latitude in the side of the Fed's balance sheet comes from the weakness of other currencies. Central Banks around the world are doing the same thing - creating currency - weakening those currencies, simultaneously actual people are selling their currency for US dollars. This increases the strength of the US dollar, and means the Federal Reserve can create more dollars to weaken it, avoiding deflation. Currencies based on scarce commodities have deflationary economies as the economy grows, which hampers liquidity and investment, the US has had that before and moved away from it because it wanted liquidity and investment. So you can predict that it will avoid deflationary environments.

All fiat currencies are in the same boat, but the dollar is not in that boat in isolation. Coordinated central bank accounts allow this to continue into perpetuity. Ie. If the European Central bank diluted their currency by creating trillions of Euros, the Euro might trade down to parity with the US dollars (at time of writing the 1 Euro can be traded for 1.09 US Dollar), instead of that happening in isolation, the Federal Reserve can also create an offsetting amount of dollars, weakening the dollar enough to force the Euro to still trade for 1.09 us dollars, while both banks have accomplished their goal of adding liquidity to their economy.

So for massive monetary unions, it is much harder to "fail" or enter into a hyperinflationary environment.

But yes, if that a lot of the newly created currency was being used to buy gold, then the price of gold would be expected to go up. It is just a much harder environment for the narrative of it becoming a replacement for the dollar to be there. Other fiat currencies outside of large monetary unions might have utility in switching to a commodity again.