Unless they made the medals much smaller, that would be incredibly expensive. They give out thousands of medals, after all. Someone smarter than me can calculate the cost based on the size of the medals and the density of gold.
Also, athletes would probably feel more pressure to sell their medals if they were solid gold. That would enrich them, which is good, but there's something to be said for the medals remaining in the hands of the athletes.
I once calculated it and came to the conclusion it was easily doable for the medals to be pure gold.
Let's take the Rio 2016 medal as a reference. It has 494g of silver and 6g of gold. For a cost of $564 [1]. There were 307 gold medals awarded[2]. This comes to a total of 173148$ for the medals.
Let's take the worst possible conversion. i.e. you want a solid gold medal with the same volume as the original. Silver has a density of 10,49g per cubic centimeter and gold has a density of 19.32g per cubic centimeter. So to get the same volume we need 910g of gold to replace the silver. Price of gold per gram in 2016 was about 40$. So this 910g of gold would cost 36400$. For a total gold medal price of 53,329,584$. Let's ignore the silver you no longer need since it's not that significant.
For reference the entirety of the rio olympics cost 13.2 billion[3]. Having solid gold medals would be about 0.4% additional cost. Yes it's a lot of money but it doesn't seem unrealistic to me at all.
It doesn't include team sport and the paralympics. But I wouldn't include the paralympics anyway, just like I wouldn't include the youth olympics. Team sport actually does have to be counted. But I don't think it changes the conclusion. By far the most olympic sports are solo.
Even if only 10% of olympic sports were team sports - but those teams were things like basketball/soccer/volleyball that have 15+ players per team - that would mean the majority of medals given out are to people who were on a team.
Teams are hardly as large as 15+. Of course the athletes that don't compete are not given medals. Even if you more then double the amount I calculated let's say 1%. That's still a reasonable price pool.
Then why not just make them out of steel, or aluminum, or--hell--plastic?
Clearly, the composition of the medal has symbolic value beyond "usefulness". Also, I expect an Olympic medal is worth at least a little more than any ol' hunk of the same constituent materials. So it's not like they are without risk as is.
Edit: this is wrong, see the comment below, I misunderstood an article that said "339 medals will be awarded". It's 339 events will be contested, and of course team events have multiple medals.
Well, not really thousands of medals - in this year's summer games there will be 339 medals awarded, so 113 gold medals.
Tokyo gold medals weigh 556g, so if they were solid gold (their weight would differ a bit but be in the same ball park) each gold medal would be worth nearly $33,000 just in metal costs, which would work out to a total of $3,694,286 for all the gold medals.
Also, athletes would probably feel more pressure to sell their medals if they were solid gold. That would enrich them, which is good, but there's something to be said for the medals remaining in the hands of the athletes.