Both butter and oil can be used to caramelize onions. Butter can add a bit of richness, but it can also burn more easily than oil. If you are making an Italian recipe, you will likely want to opt for Extra Virgin Olive Oil, as that will give you the most authentic result.

Adding a small amount of salt at the beginning of cooking can help by drawing out moisture from the onions, which can accelerate the caramelization process. I personally don’t add salt to my onions. I believe their taste is perfectly salty.

Adding sugar is not necessary as onions naturally contain sugars that caramelize as they cook. However, a small amount of sugar can be added to speed up the caramelization process or enhance the sweetness.

I never add sugar when caramelizing onions with balsamic vinegar. On the other hand, I do add some if I am caramelizing a fruit, like peaches or strawberries. That’s personal preference. You can try both ways, and see which one you prefer. However, the least sugary the healthier.

Yellow onions are often recommended for caramelizing due to their balance of sweetness and astringency. However, red, white, or sweet onions can also be caramelized, so use whichever is available to you or the one you like most. You could also try combining one of each, and see how that contributes to the overall taste.