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In a large saute pan or pot over medium-high heat, heat the oil until it shimmers. Add the onion, garlic powder, salt, black pepper, nutmeg and cayenne pepper and cook, stirring frequently, until the onions start to soften and turn translucent, about 5 minutes.
Add the spinach and evaporated milk and bring to a simmer. Add the gnocchi, cover and cook, stirring occasionally, until the gnocchi are soft and tender but not mushy, about 5 minutes. Divide among bowls and serve hot.