X-ray magnetic circular dichroism spectroscopy using an X-ray free electron laser is demonstrated with spectra over the $Fe L_{3,2}$-edges. The high brightness of the X-ray free electron laser combined with high accuracy detection of incident and transmitted X-rays enables ultrafast X-ray magnetic circular dichroism studies of unprecedented sensitivity. This new capability is applied to a study of all-optical magnetic switching dynamics of Fe and Gd magnetic sublattices in a GdFeCo thin film above its magnetization compensation temperature.