GdNi is a ferrimagnetic material with a Curie temperature TC = 69 K which exhibits a large magnetocaloric effect, making it useful for magnetic refrigerator applications. We investigate the electronic structure of GdNi by carrying out x-ray absorption spectroscopy (XAS) and x-ray magnetic circular dichroism (XMCD) at T = 25 K in the ferrimagnetic phase. We analyze the Gd M4,5-edge (3d -4f ) and Ni L2,3-edge (2p -3d) spectra using atomic multiplet and cluster model calculations, respectively. The atomic multiplet calculation for Gd M4,5-edge XAS indicates that Gd is trivalent in GdNi, consistent with localized 4f states. On the other hand, a model cluster calculation for Ni L2,3-edge XAS shows that Ni is effectively divalent in GdNi and strongly hybridized with nearest neighbour Gd states, resulting in a d-electron count of 8.57. The Gd M4,5-edge XMCD spectrum is consistent with a ground state configuration of S = 7/2 and L=0. The Ni L2,3-edge XMCD results indicate that the antiferromagnetically aligned Ni moments exhibit a small but finite total magnetic moment ( mtot ∼ 0.12 µB ) with the ratio mo/ms ∼ 0.11. Valence band hard x-ray photoemission spectroscopy shows Ni 3d features at the Fermi level, confirming a partially filled 3d band, while the Gd 4f states are at high binding energies away from the Fermi level. The results indicate that the Ni 3d band is not fully occupied and contradicts the charge-transfer model for rare-earth based alloys. The obtained electronic parameters indicate that GdNi is a strongly correlated charge transfer metal with the Ni on-site Coulomb energy being much larger than the effective charge-transfer energy between the Ni 3d and Gd 4f states.