Former world champion Shaun Murphy raced into the quarter-finals as he dispatched Ricky Walden 6-1.
Five-time champion O#8217;Sullivan trailed 2-0 and 4-2, levelling up the score on both occasions before his Thai opponent produced a wonderful 128 break to move within one of the last eight.
Having lost to Elliot Slessor at the Northern Ireland Open in one of the upsets of the season, O#8217;Sullivan had to pull out all the stops to overcome the challenge of Songsermsawad, a 22-year-old whose future appears bright on this showing.
The Chinese was soon level again and moved ahead for the first time as he took frame seven to lead 4-3, only for Gould to reel off three in succession to advance.
Gould took the opener courtesy of an 82 break and edged the fifth by a single point, 63-62, despite a break of 62 from Xiao.
Martin Gould 6-4 Xiao Guodong (Match 120)