That isn't exactly small denominations.
The question is, would you accept gold payment from a complete stranger? I would not, without a third party verifier or a scientific method of verifying weight, purity, etc.
I would not accept a $1700 in $100 bills from a stranger without very close examination of the bills, and I feel a lot more comfortable with that.
Drilling in from the side of a 1oz coin, replacing with lead, and then resurfacing the edge could easily remove 20-30% of the gold without having to have top notch counterfeiting skills.
The simple answer to the lead filled coin problem is that you’ll make it underweight.
Or if you cast a fake of the right weight, it will be oversized.