If you want to know what the temp really is, take the cap off with the engine idling and put a thermometer in the water. (A candy thermometer will work fine - but don't tell my wife.)
If you think you might have an air pocket, loosen the sending unit and see if water starts seeping out around the edges. If it does, you're OK.
I would suspect the gauge, although I'd want to verify the temp with a thermometer first. Until you know for sure that the problem is an incorrect reading not an overheating problem, I'd err on the side of caution.
