Fungible means you can break it down like how you can make change for a dollar, or how you can make different size gold coins, aka 1 Troy ounce, 1/2 ozt, 1/4 ozt, 1/10 ozt, etc.

Precious metals have all the properties of "money" largely because they can belted down or cut down to different weights and sizes.

Sticking to Fiat, a dollar can be broken down to quarters, dimes, nickels, etc.

That's fungible.