120C sounds me a litlle bit too hot !
With my 240D, I have never go over 90C.
The normal temperature when I drive calmly is about 82C (the needle is just above the 80C mark). When I 'm running on a hill, with the car loaded (with the foot on the floor, of course...), the temperature increase slowly, but so far it never go over 90C.

I should precise that on the 240D the radiator fan turn continuously contrary to the 300D which have a fan clutch. Maybe it can have an influence on the cooling.

__________________
in France : 240D 1981 380 000 km
240D 1984 252 000 km
300D 1978 325 000 km
in the US : Ford Tempo 1993 70K