I think it's perfectly fine to be looking for gold in creek beds, assuming that you're in a gold-bearing area of course. Knowledge is the key for finding gold. If it was me, I would be testing the creek bed with a pan before getting out the detector. If you're getting decent gold in the pan, your chances of finding some with the detector are reasonable too (although I would just pan/sluice). On the other hand, if you get nothing in your pan after doing a number of test pans in different areas (inside bends, rock bars etc) then it's a safe bet that there is no gold in that part of the creek and you move on. You'll need to be looking in areas where the gold is alluvial (deposited by water/erosion) or where reef gold is shedding into a creek or down the side of a hill. You don't need water either if you have a good pan. Always keep an eye out for gems too
I would think that there is a lot less iron stone in creek beds, that is certainly the case here in Aus. That iron stone gets noisier the longer it sits on the surface and becomes oxidised. However, I'm by no means a geologist nor familiar with your area.
I think it's worth switching to coin mode just for the simple reason that it's all a part of learning your detector and the ground you're working. In saying that, don't trust your readings too much until you get much better with it - so dig everything anyway. I've also found the readings to be somewhat more unreliable due to the mineralisation. This is especially so on small and deep objects like .22 bullets but on coins and up it's usually pretty good. In general, I think the idea that jumpy signals are junk tends to hold true most of the time. You could try turning the sensitivity down but I suspect it's already quite low anyway. Personally, if I'm looking for gold in an area that has little junk, I just want my machine to find metal and the prospecting mode will give you the best chance of doing that. The 705 will scream when you hit real metal!
When you get a target, use your pick to scrape back the top cm or so of dirt as this will get rid of the majority of the loudest iron stones and that mineralised crust. Swing again in prospecting mode and if the signal gets better you're probably on to something. It's worth checking out with coin mode at this point. If it doesn't get better or is completely gone, your piece of metal was right near the surface. In these areas, you MUST hunt with tracking on. I tend to auto GB to begin with then just use tracking from there on. I've never found tracking to GB out a genuine target although I still switch mine off when I find one, as it helps to "reset" the auto tracking from time to time by switching it off and on again.
In our detecting club, many of the guys running PI machines still have an xterra or other VLF machine in the back of the car. Why? they use them in known gold nugget areas that are high in junk and where most others PI users get sick of digging junk all day. Here, the discrimination ability of the xterra has a real advantage. Something to consider when choosing a place to hunt
