Proxy cache zone static is unknown

"proxy_cache" zone "STATIC" is unknown

Means that you forgot to configure it. http://nginx.org/r/proxy_cache_path


As the answer above suggested, you are missing the proxy_cache_path Directive.

In your case proxy_cache_path can be:
proxy_cache_path /var/cache/nginx keys_zone=STATIC:10m;

You can find more information on Nginx Documentation.