Why is the word "folks" pronounced [foʊks]?

This is the result of historical loss/vocalization of the sound /l/ in certain contexts. As Max Williams mentioned, we also see this loss in -alk words like walk, talk, chalk, balk, stalk. Some American English speakers have restored the /l/ in some of these words as well as some other words that traditionally have silent /l/ (like the -alm set). (I don't know if any speakers have retained the /l/ via continuous transmission from some accent that didn't have this sound change.)

The word yolk shows the same phenomenon.

The pronunciation of "olk" in non-Germanic words, and proper names is somewhat variable. The Oxford English Dictionary gives pronunciations with /l/ for "polka" in both British English and American English (although they usually have different vowel qualities), as well as an l-less pronunciation for American English speakers only.