Is the sender and the gauge grounded at the same point? If not, run the sender ground and the gauge ground to the SAME ground point. Don't run the gauge to the sender, then to ground or you may create a loop and cause inaccurate readings.
I used an existing firewall ground just outside of the master cylinder. Ran wire from sender to gauge, left 6 inches slack, then cut the wire, crimped a loop connector onto each wire, and bolted it under the ground bolt.