Melt 1 tablespoon of butter in a large frying pan over medium heat.

Add finely chopped yellow onion to the pan and cook until softened, about 4 minutes.

Remove from heat and let cool slightly.

Place torn white bread pieces in a stand mixer bowl.

Add milk to the bread and let it sit until absorbed, about 5 minutes.

Add the cooled onion, ground beef, ground veal, egg, salt, pepper, and nutmeg to the mixer bowl.

Beat on medium speed until the mixture is light in color and appears sticky, about 5 minutes.

Fill a medium bowl with water.

Form the meat mixture into 1-inch balls, wetting your hands in the bowl of water as needed.

Place meatballs on a baking sheet.

Wipe the frying pan clean with a paper towel.

Melt the remaining 2 tablespoons butter in the pan over medium heat.

Add half of the meatballs to the pan and fry, turning occasionally, until browned and cooked through, about 8-10 minutes.

Transfer cooked meatballs to a serving dish and set aside.

Repeat with the remaining meatballs.

Sprinkle flour over the drippings in the pan and whisk until no longer raw tasting, about 1 minute.

Slowly pour in beef broth, whisking to smooth out any lumps.

Cook until the mixture boils and thickens, about 3 minutes.

Strain the sauce through a fine-mesh strainer into a heatproof bowl and discard the solids.

Transfer the strained sauce back to the pan.

Reduce heat to low and whisk in sour cream.

Season with salt and pepper to taste.

Return meatballs to the pan and heat through, about 5 minutes.

Transfer meatballs and sauce to the serving dish and sprinkle with parsley.