What happened

Shares of Endeavour Silver (NYSE:EXK) fell around 17.5% in September, according to data from S&P Global Market Intelligence. That's a reversal of recent trends, which saw the stock up by roughly 90% for the year at one point in July. But that doesn't even give full justice to the stock's performance this year, noting that it was off by about 50% during the worst of the early 2020 bear market. Indeed, from its low point to its high point, the stock rallied over 200%. 

So what

The price of the gold and silver miner is largely driven by the prices of the commodities it produces. That's par for the course for precious-metals miners and shouldn't be a surprise to anyone. Thus, the volatile swings in Endeavour Silver's price so far in 2020 have tracked along with the ups and downs in gold and silver. That said, as a miner, the company's top and bottom lines tend to be leveraged to commodity price moves. Thus, the huge moves in the stock.

A gloved hand holding a silver bar

Image source: Getty Images.

What's most notable here is that Endeavour Silver, as its name implies, produces a fair amount of silver. Roughly 50% of its revenue is derived from that metal. Silver rallied much more strongly than gold after the bear market and, after peaking in July, has pulled back about 20%. Gold, for reference, has dropped about 9% over that same span. More specifically, in September, silver fell about 16%, with gold off by about 4%, using iShares Silver Trust and SPDR Gold Trust as proxies. With a material silver footprint, it's hardly surprising that Endeavour's stock fell sharply in September.   

Now what

Even after the recent price drop, Endeavour Silver's shares are up notably so far in 2020. Investors should remain cautious since precious metals can be very volatile, as September has proved. In the big picture, gold and silver investments are best looked at as diversifying assets. But after such a big run this year, those in search of a safe-haven investment should strongly consider cash as an alternative to buying shares of Endeavour Silver. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.