That's the dust shield and, because I've done it before myself, I'll speculate that someone balanced the struthousing on said shield to perform any number of tasks on the spring/strut/strut mount.
The sad reality of it is that once the shield is bent, it's usually ****ed for good. Having it bent in towards the rotor will (in your case) cause it to cut the rotor (does it have a huge ridge in it now?) or bang against the rotor when going over bumps (clang!). In response, most people bend the shield back towards the engine. This would work, except for the fact that there's a lot of surface area in the shield and very little clearance to get a specific angle on it. When the shield is pushed back towards the car, it will rub against the lower control arm ball joint, which results in a screeching or chirping sound over rough roads. Unfortunately, it's difficult to get the shield set just right.
In my case, I ended up cutting out the dust shield with a wizzle wheel. Replacement involves pulling the bearing, and I don't want to deal with that right now. Earlier this week, I did a 525 with bad front shield and was able to bend it back reasonably; the real problem was a poorly adjusted park brake, but the customer got something extra.
best, whit