Apparently, because of its shape according to the earliest citation from 1925 in OED.
A gong, a medal. (An old Army term suggested by the shape.)
Edward Fraser and John Gibbons · Soldier and Sailor Words and Phrases ·
Cassell's Dictionary of Slang (By Jonathon Green) gives an Anglo-Indian origin and 1910+ for the date of origin:
Anglo-Ind. gong, a metal disc, not musical, used for striking the hour, thus imported by Indian Army veterans
The Partridge Dictionary of Slang and Unconventional English (edited by Tom Dalzell, Terry Victor) gives 1921 for the date of origin but I couldn't find the citation.