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Figured it out, you need to change the margin value in the apex:axis.

Example:

<apex:page controller="ISOGaugeController2b">
<script>
MyChart1.on('beforeconfig', function(config) {
    config.axes[0].margin=-10;
});
</script>
<apex:chart height="300" width="450" animate="true" data="{!data}">
<apex:axis type="Gauge" position="top" title="Dan Test"
    minimum="0" maximum="1000" steps="10" margin="-9"/>          
<apex:gaugeSeries dataField="size" donut="50"/>
</apex:chart>
</apex:page>

Shows up like this: