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Jacek:
Since you have movement on the gauge, even a small amount, I would surmise that your sender is probably alright. I guess it could be gunked up or the cricuit board that the arm rubs against could be screwed, but unless you put crud in your gas tank directly I would find this unlikely.
Your best bet is a loose electrical connection somewhere between the dash and the sender assembly.
First, check the connections on the back of the gauge. Are they tight? All wires and connections clean at the dash fuel gauge? Next, pull the panels in the trunk/rear of the vehicle to expose the wiring for the gauge. There are bascially two wiring units that run along the driver's side, over the rear wheel well, and into the boot. These are the speedo cable and the fuel sender cable.
The wiring for the fuel sender has a connection right on the back of the wheel well. Is this corroded or loose? Check it to be sure and play with it while watching the dash... even the slightest corrosion can cause problems with the flow. If that connection is tight, check the grounding wire for the fuel sender. If you follow the wiring off the connector I mentioned earlier you will see a thin single wire go off on its own to a bolt just inside the driver's side rear wheel well (inside the car). If the bolt is loose or the wire is chafed or something it would affect the ground.
If the connection at the rear of the wheel well is tight and the ground is clean/tight I would next inspect the connection at the sender assembly by pulling the access panel on the floor of the back/trunk. The wires lead in and are welded/soddered to the sender assembly. Foolishly, Volvo/Bosch/Whoever didn't design this unit to protect the actual joint between the wire and teh sender unit. It is actually exposed via a small slit between teh plastic end (looks like a marshmallow) and the plate of teh sender assembly. Because of this, the connection can corrode (its fairly exposed under there) and lead to problems. I recently had to replace my sender when the wire actually rotted off. It was actually funny... by firmly pushing the marshmallow thing back onto the sender I could get it to work again, but only while I held it obviously.
On a sidenote, you could also check to see if the sender wiring is intact by listening for the pre-pump in the tank. Of course, if the pre-pump is dead this would be ineffective, but it's a shortcut to avoid pulling the access panel. Contrary to what many people believe, the car can run fine with a dead-pre-pump, even on turns. It will strain the main pump and shorten its life, but it won't actually kill the car.
If none of this works I would surmise that either the wiring leading to the back from teh dash is corroded/damaged, or the gauge itself needs to replaced. You could always replace the fuel relay as well to be sure that isn't involved, but I'm not sure what role it plays in the fuel gauge functionality.
Good luck,
Rick
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