Yep, could be a bad gauge or sensor. I'd go get a nice aftermarket gauge for water and oil and throw them in an autometer cluster bezel if I were you.
2000 Mustang GT Steeda #0048 34k miles. 99 Cobra 4V swapped, FTBR IRS swapped, exhaust, tuned by James Gordon.
Just because I give you advice, doesn't mean I know more than you. Its just means I've done more stupid ****.