A rare sight of iridescent clouds appeared in southwest China earlier this week. These can also be called rainbow clouds.
These form in cirrus or in alto-cumulus clouds that are made of ice crystals in the sky. This is caused by diffraction. Diffraction is the scattering of the sun’s light through these small ice crystals or water droplets. Basically, as the sun’s light moves through these droplets and ice crystals in the sky, the crystals bend the light in different directions creating this colorful effect.
It is rare to see because you need the perfect conditions for this to happen. We did see a few iridescent clouds in Central PA around two years ago.