Tool Touch With Prox?

I'm working at designing a small CNC machine for milling lock set mortises and would like to incorporate automatic tool length detection.  I was wondering if a proximity switch could be used to accurately detect the tool tip.  The tool would be spinning slowly in the spindle and lower into the prox's detection field from above the switch.  The tool size, shape and material makeup should stay the same from one tool change to the next, so I shouldn't need to worry about a variety of different tools being detected differently by the sensor. 

Thoughts and opinions?  Think this could work consistently? Or would it be better to simply use a conductive pad with a lead connected to the tool or conventional normally closed switch.