The grinding may happen when something, like a foreign object, or a ball bearing, or part of a bearing cage, gets in-between the fork tube and the head tube. Gravity usually pulls what ever it is toward that bottom cup. Another cause could be loss of bottom bearings or a bent fork tube, (but that does not look to be the case). Another cause could be the joints inside the head tube interfering with normal turns of the steering. It could use a brush of some red primer.