Gates, the New Zealand Open winner in January who earned a 2011 PGA Tour card with a 16th-place finish on the Nationwide Tour money list, had a 12-under 204 total on the Coolum course.
Gates finished with a 10-foot par putt after missing the 18th green with his approach.
“This is a course where it’s difficult to avoid bogeys,” Gates said. “The first five holes were tough. I don’t think there was a stage where we knew what the wind was going to do, and if we did, it changed quickly.”
“It felt pretty good,” Gates said. “The wind today made it tougher than the first two days, but I kind of ground it out again and I never really got anything going.
“But it’s kind of the nature of the beast with this sport – you can hit some bad shots and save on par sometimes, so it’s pretty good. I did that today and I’m still in the tournament and still have a good chance tomorrow.”
Australian Aaron Townsend, who led for much of the back nine, bogeyed the final two holes for a 70, leaving him tied for second with Champions Tour player Peter Senior (68).
Townsend, who turned pro in 2003, has only two wins on the Australian secondary tour in his career.
“There is a lot on the line. This could mean a lot to me for the future,” Townsend said. “Tomorrow is a very important day.”
Geoff Ogilvy, the Australian Open winner last week, shot a 71, and defending champion Robert Allenby had a 72. The two Australian stars were six strokes behind Gates.