Yes, that's where it goes. People who have installed low oil pressure audible alarms have worked on that fitting a lot. If you search on low oil pressure alarms, you should find lots of info. While you're working on it, it would be a good idea to install a low oil pressure audible alarm because the oil cooler hoses on these engines make them susceptible to engine destruction from losing oil thru a failed oil cooler line that is not detected quickly enough via a visual gauge.
Some 617's (W126?) came with electric oil pressure gauges I think.

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1977 300d 70k--sold 08
1985 300TD 185k+
1984 307d 126k--sold 8/03
1985 409d 65k--sold 06
1984 300SD 315k--daughter's car
1979 300SD 122k--sold 2/11
1999 Fuso FG Expedition Camper
1993 GMC Sierra 6.5 TD 4x4
1982 Bluebird Wanderlodge CAT 3208--Sold 2/13