1999 GMC Yukon Coolant Temp Guage fluctuates erratically.

Engine Cooling problem
1999 GMC Yukon V8 Four Wheel Drive Automatic 165K miles

For a week now the temp guage on my truck's display has been fluctuating suddenly and spontaneously. The cabin heater also stops blowing HOT air when the guage goes to max.

I checked: coolant level - good. Upper radiator hose - warm/hot with good pressure. Hose to heater core - warm/hot.

Any thoughts as to what is causing this?
Have a great day!