Fire Rainbow or circumhorizontal arc, is a rare optical phenomenon. It is a kind of ice halos formed by the refraction of sun. Actually, it has nothing to do with fire or rainbows, but the way it looks in the sky corresponds to the name exactly.
Rainbow colored flame appears mainly during summer when the sun is at the 58 degrees and higher. There should be a high elevation cirrus cloud with plate-shaped ice crystals. Then, the sunlight has to go through the ice crystals at a particular angle and, as a result, a beautifully colored prism appears in the sky.
The location also matters. Fire rainbows can't be most frequently seen in places north of 55°N or south of 55°S. So Colorado, set between 37°N and 41°N latitude, is not the prime destination for this wondrous natural phenomenon. Yet, there were several reports of such sightings around Denver. In the US circumhorizontal arcs appear occasionally, usually several times a year, from late March till late September.