The temp gauge is pretty imprecise indeed but if your engine was over heating it would go to red so I do not think you have an overheating issue...at least not yet. It you smell coolant then you do have a leak somewhere. Here are possible caused on this car: A cracked expansion tank, leaking water pump, a cracked hose or hose connector. The hose connectors are plastic and do not age well at all.
Here is what happened to me 18months ago. It started with a low coolant issue for few days that I could not locate and then it turned into a more obvious problem. Here is the post.
http://www.xoutpost.com/x5-e53-forum/...t=coolant+hose