Can gamma radiation cause transmutation?
Yes.  

See Photo-Fission in Heavy Elements (1947) Phys. Rev. 71, pages 3-10 :


  fission should be possible for all heavy nuclei which lie well
  beyond the minimum of the packing fraction
  curve, provided sufficient excitation is provided
  to produce the necessary deformation of nuclear
  fluid which precedes division of the nucleus.
  Such excitation can be provided by particle capture or by absorption of a $ \gamma $-ray into the
  nucleus.


"Packing fraction curve" is an older term for the nuclear binding energy curve, so the reference is saying that gamma ray induced fission is possible for nuclei that are substantially larger than nickel. 

On the low end of the binding curve, there is a different process called photodisintegration.  


  For example, magnesium-25, upon absorbing a photon of sufficient energy, emits a proton and becomes sodium-24.


Even the most stable nuclei such as iron and nickel can be disintegrated by energetic gamma rays.   

See Photoneutron Thresholds Phys. Rev. (1951) vol. 84, pages 387-394 for quantitative information concerning how much energy a photon must have to photodissociate a given nucleus.