Two Chinese golfers made huge moves up the leaderboard after both matched Gough's course record with rounds of 64 on Thursday.
Chi Chun Chen's 64 rocketed him into solo third at 9-under 207 while his countryman, Stanley Lin, also shot a 64 to move into a tie for 19th at 2-under 219.
Second-round leader Taichiro Ideriha is three back after an even par round of 72 left him at 8-under 208 and tied for fourth with Australian Tyler Duncan.
On the women's side, Yuna Araki is one step closer to running the table at Southern Golf Club.
Araki, who came to Melbourne in good form after tying for third at the Asia-Pacific Amateur, shot a third-round 68 (-5) to move to 10-under 209, widening her lead to five shots over Hsin Chun Liao of Chinese Taipei.
Mamika Shinchi of Japan and reigning Australian Women's Amateur champion Fiona Xu of New Zealand are the only other two golfers in red numbers at 4-under 215.
The men's cut came at 3-over while the women's dividing line was 9-over.

