Nginx static files location block not working when added to nginx.conf?

Put this before your other location block:

location ~* \.(?:ico|css|js|gif|jpe?g|png)$ {
    expires 30d;
    add_header Vary Accept-Encoding;
    access_log off;
}

That should work.

You could also use this:

## All static files will be served directly.
location ~* ^.+\.(?:css|cur|js|jpe?g|gif|htc|ico|png|html|xml|otf|ttf|eot|woff|woff2|svg)$ {
    access_log off;
    expires 30d;
    add_header Cache-Control public;

    ## No need to bleed constant updates. Send the all shebang in one
    ## fell swoop.
    tcp_nodelay off;

    ## Set the OS file cache.
    open_file_cache max=3000 inactive=120s;
    open_file_cache_valid 45s;
    open_file_cache_min_uses 2;
    open_file_cache_errors off;
}