1. Place onions a large pot of boiling water 30 seconds; drain. Plunge into ice water to stop the cooking process; drain. Trim and discard ends of each onion, and slip off skins.
2. Sterilize jars, and prepare lids.
3. While jars are boiling, bring vinegar, sugar, salt, and 1/2 cup water to a boil in a 6-qt. stainless steel or enameled Dutch oven over high heat. Boil 3 minutes, stirring occasionally. Add peeled onions, and return to a boil. Reduce heat, and simmer 4 minutes or until onions are almost tender.
4. Place 1 1/4 tsp. mustard seeds, 1/2 tsp. celery seeds, and 4 cloves in each hot jar. Pack onions tightly in jars, leaving 1/2-inch headspace. Cover onions with hot pickling liquid, leaving 1/2-inch headspace. Seal and process jars, processing 10 minutes.
5. Remove jars from water, and let stand, undisturbed, at room temperature 24 hours. To check seals, remove the bands, and press down on the center of each lid. If the lid doesn't move, the jar is sealed. If the lid depresses and pops up again, the jar is not sealed. Store properly sealed jars in a cool, dark place up to 1 year. Refrigerate after opening.