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LDC1000: Gear-tooth counting of a wheel containing very fine teeths

Part Number: LDC1000

I could count bigger gear-tooths with using LDC1000 whose coil size is equal to the width of one tooth. But in my case, I need to count gear-tooth which is smaller and finer whose tooth is about 1mm width and 1 mm apart and the whole wheel has 1000 tooths running at 1 rotation/sec.(1 kilohertz rate).  I tried to use ldc1000evm for this scenario and could see signal waveform which has lots of noise and couldn't distinctly identify and perform a count.

I could even see the attached waveform(may be noise), when the wheel is NOT in motion (when gear tooth is idle). Is inductive sensing suitable for my need? How can I design a coil which is so small to suit my need? Any post processing to the captured signal be done to remove the noise or perform some software calculation to identify and count the gear tooth?