I am redoing wiring and gauges in my 72 corvette, I noticed the water temperture and fuel gauge have a resistor band going across the terminal post. Is the resistor to prevent power surge, needle stability? Why on the fuel gauge when I place a meter on the terminals are they grounding to the housing. Is there anywhere the resistors can be purchased?

I believe the purpose is to "steady" the needle, and to provide the correct readings on the gauges. Sorta like a "buffer". They also will allow for the mis-calibration on certain sensors used in production.
If you are testing the gauges with the resistor in place, you will likely get a reading as if both terminals were grounded. I'm not fully versed in instrumentation methods, but not all gauges will test this way.
As far as where you can buy the resistors, I don't think I've ever seen them advertised specifically, but you might try LECTRIC LIMITED. You might even find something at the local Radio Shack, or electronics supply store.

Thank you for the information.  Gary