Sift flour, sugar, salt and baking powder together in a large bowl. Using pastry blender or knives, cut in butter until mixture resembles coarse cornmeal.
Beat the egg together with 2 tablespoons of the water and the almond extract. Add this to the flour mixture and mix with a fork until dough leaves the sides of the bowl.
On a lightly floured surface, knead the dough until it is smooth. Wrap it in foil or cling-wrap and refrigerate for one hour.
Meanwhile, preheat oven to 350 degrees F (175 degrees C).
Form dough into 1 inch balls and place them 3 inch apart on ungreased cookie sheets. Flatten each cookie to about 1/4 inch thick and press an almond into the center of each. Beat egg yolk with 1 tablespoon water and brush on cookies.
Bake 20-25 minutes or until golden brown. Remove to wire rack to cool.
