The earth is divided into three parts: the crust, mantle, and core. And of these, the nucleus, which is the central part of the earth, is the one that is relevant to this question.
This nucleus can be divided into an inner core and an outer core. The inner core is a solid metal, while the outer core is a liquid metal. The liquid metal in the outer core seems to cause convection around the inner core. In other words, molten metal like lava is moving around the solid metal.
Iron and nickel are metals that conduct electricity easily, so when they move in this way, electricity is generated just like in a generator.
In other words, the earth is generating electricity at its own center. And that electricity creates the force of a magnet. And because it is a very large magnetic force, we on the earth can observe it.

The idea of geomagnetism explained here is called the dynamo theory, which is the theory most scholars accept at the moment. However, there are still many things we do not know about the geomagnetic field, and new theories may overturn this idea in the future.