There are several ways to do this...I am not a sign maker, so take it for what it's worth.

In the past I have pre-finished the sign blank and let it cure really well - sometimes this takes a few days depending on humidity. Then cover the face of the sign blank with GerberMask Ultra II - It is not cheap, but it works pretty well. Then carve through the GMU2 and put your design into the sign. Clean it, and then paint or size the areas you want to paint or gold leaf. It holds a pretty crisp edge with little bleed as long as you use sharp tools.

The other thing that may work for you is 'Snake Oil' as Joe C. coined - rubber cement that is applied to the pre-finished blank as above, carved through and peeled off. While I haven't tried this, I have used PVA (Polyvinyl Acrylate), like they use for fiberglass mold release. It takes time to apply in several thin coats (or it will alligator) and it washes off with warm soapy water.

I've also heard of using a white potato cut in half and rubbed all over the surface of the pre-finished blank to coat it with a film of starch. A noble idea, but I have no 1st hand experience doing it.

-B