Peugeot 307 1.6hdi temperature gauge indicating low

Remove the gauge cluster and check for a bad ground. If it is bad you can resolder the trace on the back of the cluster back to the groung pin for the connector.

Normal to COLD?
You would only lose coolant if the engine was overheating - or, as you say - a leak.

It's probably a faulty temperature sending unit - these are common failures. You actually have nothing to worry about. The unit sends a signal from the engine to your temperature gauge in the car. Even if the unit is faulty the engine is still operating at the correct temperature - it's the signal to the temperature gauge that is wrong.

Your temperature sensor will look something like in the image below:
It's inexpensive and quick to rectify. A new sender unit can be fitted within minutes. Give a mobile mechanic a call ..

I read your question about the car heater.. No, the sensor wouldn't cause the heater to blow cold air. That fault is either air in the cooling system/heater system, or a blocked heater matrix.

Remove your radiator cap/coolant bottle cap. Open the heater controls to HOT and set on maximum. Start the engine and let it tick over - see if it forces any air out of the system when the heater should begin blowing hot.

If the heater still blows cold it may have a blocked matrix. Try a bottle of radiator/coolant system flush to see if that dislodges the blockage. The instructions will be on the bottle of coolant flush

Thermostat may not be working properly, hot coolant has to circulate via the heater core in order to get heat. Normally operation temperation should be 180 to 200 degrees.

I'm not a Peugeot expert, but do you know if the engine is warming up normally ?
The thermostat could be stuck open, or the engine could be low on coolant, or the sending unit for the gauge may have failed. If the engine is warming up you should be able to ground the wire to the sender and watch the gauge move.

2005 Instrument cluster layout

1. Speedometer
2. Brake warning light
3. Turn signal indicator light
4. High beam indicator light
5. Malfunction Indicator Light (MIL)
6. Airbag warning light
7. Anti-Lock brake warning light
8. Tachometer
9. Security alarm indicator light
10. Oil pressure warning light
11. Electronic Stability Program (ESP)/
Traction Control System (TCS) indicator light
12. Tire Pressure Monitor warning light (base)

13. Temperature gauge
14. Electronic Vehicle Information Display
15. Tow/Haul indicator light
16. 4WD Low mode indicator light
17. Seat belt reminder light
18. Cruise control indicator light
19. Odometer/Trip Odometer
20. Transmission gear indicator
21. Fuel gauge
22. Electronic Throttle warning light (5.7 Hemi)
23. Front fog light indicator light
24. Voltage warning light

it could be a couple of things, first, check the wires to the temprature sender unit make sure they have not broke, as it was sudden this may be it, also it could be the sender unit it self as a freind of mine had with her car i changed that and the one for the radiator switch, but most of the time it will be something to do with the sender unit on the engine...hope this helps

it will or should be on top of the engine in the cylinder head area??

Sounds like you have installed a 'over-temperature switch' type sender unit- this type of sensor is only meant to control an over-temperature alarm indicator lamp that is either 'on' or 'off'.

The temperature gauge requires a 'variable resistance type' temperarure sensor to control the meter deflection.
When cold the temperature sensor is of high resistance, hence less meter deflection;
when hot temperature sensor is of low resistance, hence more meter deflection.

You need to procure a matching sensor to suit the type of gauge installed.

Is it possible you have connected to the temperature wrong temperature sensor? - most vehicles are fitted with both a gauge type (variable resistance) sensor to drive the temperature gauge, as well as a switch type (on or off) sensor to drive the overtemp indicator light.

take the cap off of the radiator (whil engine is cold) start and run the vehicle. keep runnig 30mins after the vehicle is hot keeping notice of the rad fluid level.
keeping the cap off will prevent the pressure build up that woiuld keep the air in the system, keep adding water or antifreeze as the level goes down. this may take an hour or so.
also with the cap off, you will be able to see if your water pump is operating correctly. you will visibly be able to see movement in the rad when the pum is engaged.

maybe a fuse or a wire got disconnected from the guage