Blanch: Bring a large pot of water to a rolling boil over high heat. Add onions and cook for 1 minute. Drain and rinse with very cold water. Peel onions, leaving the ends intact.

Cook: Combine sugar and water in a medium saucepan over medium heat. Stir only until sugar is dissolved. Bring to a boil, wiping down the sides of the pot with a wet pastry brush (do not touch the mixture). Do not stir. Keep boiling until the mixture turns a pale golden color. Start
swirling the pan until the color is a deep amber (color will change quickly). Quickly remove from heat and carefully add wine (the steam will explode upwards so be careful).

Return the pot to the flame and simmer, stirring until the harden sugar that has formed, has dissolved.

Simmer: Add onions, red wine vinegar, oil, salt, peppercorns and bay leaf. Simmer uncovered for 1 hour, stirring occasionally. Remove onions from liquid and transfer to a serving bowl.  Continue to boil liquid until reduced and slightly thickened, approximately 3 minutes. Watch
carefully as the liquid can quickly burn. Add balsamic vinegar and pour liquid over onions.
Cool to room temperature, and serve.

plan ahead - This dish can be prepared up to 2 weeks in advance.  Cover and store in the refrigerator.  The flavors deepen with age.
simplify - Use frozen pearl onions when fresh cipollini onions are not available.