I imagine making/using an existing Xposed location module would be the best solution.While that does spoof locations Pokemon GO doesnt like that and it will act up if it detects that in use. Something else needs to be done.
Alternatively, I would say decompile/baksmali the apk, force the "Mock Location" detection method to always return false, and rebuild it. I don't know what other checks it may have, but I've done similar things to other apps (e.g. forcing internet off to disable a region check, etc)