We present results of self-consistent linear-muffin-tin-orbital calculations with the atomic-sphere approximation for hcp bulk Gd, using the local spin-density approximation (LSDA) and gradient correction (GC) for the description of exchange and correlation. In the LSDA calculation antiferromagnetic order is favored over the ferromagnetic, and experimentally observed, structure. The GC weakens the bonding, leading to a higher equilibrium lattice parameter. At the new equilibrium volume the ground state is ferromagnetic. Our results point towards a magnetic phase transition under pressure.