Have you done a resistance test on that sensor? Here is a good tutorial on how to do it as long as you have your multimeter:
https://www.youtube.com/watch?v=wFHWpgHMAvY
So, you are running your factory temp gauge, correct? You still have the factory terminal connector which prevents you from getting the wires mixed up for knuckleheads like me, right? Palf70step is right. You want to ensure that you eliminate all that pesky engine static by grounding the engine to the frame if necessary because it is the power of gremlins.