If you are sure that your phono stage contains a true balanced circuit inside and is not just using XLR input jacks, then please also tell us what kind of interface there exists between the tonearm and the phono cable. If it is a DIN 5-pin interface, then you would have a female DIN plug at the end of your phono IC. Inside the tonearm, 2 pins are used for hot and "ground", respectively, of the R channel, and 2 other pins are used for hot and "ground" of the L channel. The middle or 5th pin is connected to that dangling ground cable to which you referred. Don't worry about that at all; use it as a ground or don't connect it. You can go and buy a balanced phono IC with a female 5-pin DIN at one end and an XLR at the other, and you should be good to go. But make sure the manufacturer guarantees the IC is wired for balanced circuits. What happens is that the R and L "ground" connections from the DIN plug are now used for the negative phase of the balanced signal, while the hot side carries the positive phase of the balanced signal. Inside the balanced cable, there should be two identical in quality conductors per channel, one for positive and one for negative. That's key. The pos phase by convention usually goes to pin2 of the XLR, and the neg phase goes to pin3. Pin1 is reserved for any shield or ground internal to the cable itself.
In a single-ended cable, the "grounds" side of the R and L channel outputs, respectively and the shield are connected together, at least at one end, and solder to the barrel of the RCA male connector at the output side. The phono ground conductors in an SE cable need not be of the same quality as that which carries the hot side.
In a single-ended cable, the "grounds" side of the R and L channel outputs, respectively and the shield are connected together, at least at one end, and solder to the barrel of the RCA male connector at the output side. The phono ground conductors in an SE cable need not be of the same quality as that which carries the hot side.