Scenario: I have a zero cost OOH character (Highgarden Refugee). I have Shadowblack Lane and Street of Sisters out. Playing the Refugee is 0 cost with a 2 gold penalty. Can I use my reducers to play Refugee for free? Or do reducers not apply to gold penalties?

Well, the way it works is that the gold penalties are added in to determine total cost, then the reducers are used to lower total cost.

So you can use the reducers to lower the total of 2 you'd have to pay to play the OOH character (to 0), but the reducers do not technically lower the gold cost directly.