An inch below the top of the radiator is too high. Look at the engine side of the radiator about 3 or 4 inches under the filler neck and you'll see a line and "FULL COLD" ,indicating how far to fill (when the engine is cold). Any more than that and the radiator will "puke" out the excess. That's probably where you're loosing it.
If you're gauge is going just past half way in slow traffic, it's not that bad. Mine gets to just under half during the same scenerio. Remember, these gauges aren't that accurate so to really check the temps, go out and buy an IR thermometer. I got THIS ONE
a few years ago from Harbor Freight and it showed my gauge to be about 15 degrees high!!