[Excaliber]

It's "steam pockets", of this I have little doubt. The system does have air in it, the water flow is not constant. The low water causes steam pockets to form. Those steam pockets are HOTTER than the surrounding water, thus spiking the temp gauge. When normal water flow returns, the steam pocket get's flushed, the gauge reading returns to normal.

The big clue here are the observed temps, going from 90 to 120-130 and back in a "spike like" fashion. Until you can PROVE the gauge is bad you better believe it!!! Ignore it's readings at your own peril, you wouldn't be the first to seriously damage his engine because he chose to dis-believe a gauge.

I've seen these spikes before, in my experience it's almost always related to a low water condition. Those pockets also greatly increase, at least momentairily, the system pressure. Pressure goes up, water is released to the overflow tank (if you have one, or to the ground if you don't) and given enough time it becomes a "catch 22". Steam, loss of water, more steam because you lost water, etc.

This is one of the primary reasons I'll be using Evan's Waterless Coolant, the very high boiling point at ZERO pressure, will not over pressurize the system and push coolant out. Steam pockets will not occur. If you have a water loss problem Evans over water may just buy you enough "time" to get home, off the highway or even save your engine from damage which may occur due to extreme overheating.

If you have something like a small head gasket leak thats one way you could be loosing water and not see or sense it's loss. Sometimes a head gasket leak does little more than over pressurize the cooling system, causing it to expel water. The motor may run great, with no signs of water intrusion.