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Raducanu dished out a bagel to qualifier Viktoria Kuzmova in the first set of the round of 16 match in Auckland on Thursday, but the 2021 US Open champion was unable to continue after losing the second set 7-5.
The 20-year-old Brit ended a disappointing 2022 season early due to a wrist injury and suffered another blow ahead of the first major of this year, leaving the court in tears.
Gauff will be eyeing her maiden grand slam title in 2023 and she impressively dispatched fellow American Kenin 6-4 6-4 in the second round in the capital of New Zealand.
Top seed Gauff and her compatriot were forced to play indoors due to the rain and it was the 18-year-old who prevailed, breaking three times and saving six of the break points she faced.
The teenager will face Zhu Lin of China for a place in the semi-finals after she beat Venus Williams 3-6 6-2 7-5.
Leylah Fernandez inflicted a crushing 6-0 6-1 defeat on Julia Grabher after losing only two games in her first-round win over Brenda Fruhvirtova and the Canadian will now face Ysaline Bonaventure, who defeated Rebecca Marino in three sets.
Top seed Ons Jabeur made a winning start to the season at the Adelaide International, seeing off Sorana Cirstea 7-6 (7-3) 6-1 to set up a meeting with Marta Kostyuk
Irina-Camelia Begu claimed the scalp of Jelena Ostapenko with a 6-3 6-0 upset of the seventh seed, while Victoria Azarenka was a 6-2 7-5 winner against Zheng Qinwen and teenager Linda Noskova got past Claire Liu in straight sets.