Wrong speed, sticking needle
I have researched this problem, I own a 2000, 1500 4x4 Silverado, My Speedometer bounces on occasion. They have had recalls for years on this, It could be the grounds, mostly on the drivers side " that's every ground", On some the 20amp radio fuse under the hood effects the cluster. GM was replacing them, but if it isn't the problem you are back at square one. Also the harness was faulty. I would check for recalls first. Hope this helps.
SOURCE: location of speed sensor on 2004 silverado automatic transmission
the speed sensor is located generally on the tailshaft housing or in other words where the driveshaft slides into transmission has a small black sensor with a couple of wires going to it. those trucks have a bad problem with the cluster going out on them though. more than likely that is going to be your problem. you have to take cluster to dealership (new one) and they have to burn the current mileage into it.
SOURCE: my speedometer on my 2005 Chevy Silverado is not
did you put aftermarket tires on it? or
check the speedo sensor on the tranny
SOURCE: speedometer
The stepping motors in the gauges go bad. do a search on ebay for CHEVY SILVERADO INSTRUMENT CLUSTER for cheaper repair options. The dealer charges around $300.00. It will continue to worsen.
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