The Rainbow Goblins by Ul De Rico, 1978.
“After seven goblins try to steal it, the Rainbow is careful never again to touch the earth.”
this book is one of my more vivid childhood memories. I don’t think I’ve ever heard anyone else bring it up as something they read as a kid, but I’m sure there are people out there.
I didn’t really see anything else that looked like this until I was old enough to appreciate museums and go check them out.