The Brit, 20, put up a strong fight against the world No7 on Rod Laver Arena.
But her double faults and inconsistency from the back of the court were her downfalls in the 6-3 7-6 defeat.
Raducanu – who won a race against time to be fit following an ankle injury – appeared slightly hindered and frequently touched her stomach throughout the clash.
But from a set and a break down, Raducanu rallied emphatically and got herself right back in the match as Gauff faltered.
The 2021 US Open champ had two set points at 5-4 on the American’s serve but wasted both with unforced errors.
Gauff got the second set to a tiebreak and showed her brilliant defence to nudge in front.
She remained rock solid throughout as Raducanu lost her way with a series of errors to go 6-2 down.
The Bromley ace saved the first of four match points with a sweetly-struck backhand winner then her opponent netted a routine forehand.
But Gauff secured the victory at the third attempt after one hour and 42 minutes with a lob volley Raducanu could only chase down and net.
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