In a large bowl, combine flour and yeast; stir well.
Combine milk and butter in a small bowl; heat (in the microwave) until milk is warm and butter is softened but not melted.
Gradually add the milk and butter to the flour mixture; stirring constantly. Add the egg, sugar, and salt and knead thoroughly until smooth and elastic.
Cover with a damp cloth and let rise in a warm place until doubled in volume, about 1-2 hours (or over night).
Deflate the dough and turn it out onto a lightly floured surface. Divide the dough into three equal size rounds. Roll each round into a long roll and form a loosely braided loaf.
Connect both ends and seal the ends of the wreath together.Preheat oven to 350 degrees F (175 degrees C). Place loaf on a baking sheet lined with parchment paper and cover loosely with a damp towel. Place loaf in a warm place and let rise again for 30-45 minutes. Brush risen loaf with egg yolk. Sprinkle with pearl sugar*, if desired.Bake in preheated oven for 30-35 minutes, or until golden.
