Magnetic properties of the gadolinium intercalated graphite compound, Gd-GIC, were investigated. This is the first report on the magnetic properties of a trivalent rare-earth GIC. Differences between zero field cooled (ZFC) and field cooled (FC) susceptibility curves were observed. The ZFC curve shows a sharp decrease below 4 K indicating the existence of a disordered magnetic state. Charge transfer from the Gd atoms to the graphite host was concluded from the temperature dependence and hysteresis of the susceptibility. The orbital susceptibility does not reveal any significant anisotropy, which also indicates substantial charge transfer, supporting results of previous photoemission studies.