Seen on November 18 2006 around 5:30PM on the western horizon as the sun was setting. This is quite a rare event, though many people have reported seeing this kind of a cloud at many different occasions.

Reason for a rainbow being visible in a cloud has been given as oblique rays of the sun (58 degrees is the optimal angle) hitting a high altitude (cirrus) cloud which is mainly composed of ice crystals in such a way that the light bends through the cloud and refracts, giving rise to the rainbow phenomenon within it.

A simple Google search will yield many such recorded evidences, some more beautiful than this one. But, this is my first sighting of a rainbow cloud.

More pics.

View of the Sun setting and the Rainbow cloud to its left. (our right side)

A digital zoom closeup of the rainbow cloud. I wish I had telescopic lens! :-(

The rainbow cloud fading away…